This standard articulated a highest and best use concept that is familiar to appraisers but new to many accountants.
In some cases the help of a real estate valuation specialist who has an understanding of highest and best use and its relation to Statement no.
157, the highest and best use of all assets, including real property, should be considered when measuring that asset's fair value.
* For improved properties, the highest and best use analysis requires an examination of the property's use "as vacant" and "as improved," and the uses may not necessarily be the same.
The "before value" is based on the highest and best use of the property in its current condition (unrestricted by the easement) and may take the following into consideration, under Regs.
The effect of zoning, conservation or historic preservation laws that already restrict the property's highest and best use.
There are many highest and best use
problems associated with residential appraisals today.
2032A election, such property is valued based on its actual use, rather than on its highest and best use
. Under Sec.
The article "Highest and Best Use
: The von Thunen Connection" by Marvin L.
These ideas, originating nearly two centuries ago, are directly applicable to the modern appraisal concept of highest and best use
. They illustrate why location, externalities, product price, productivity, and production cost all impact land-use outcomes.
Accepted appraisal theory has long held that an improved parcel may have two separate highest and best uses--that of the site "as if vacant" and that of the site "as currently improved." The need for this differentiation stems from the principle that land value is residual and that property value is maximized by improvements that conform to the site's highest and best use
"Finding the highest and best uses
for real estate is a means to unlock value or tap into capital that can help institutions thrive in an increasingly competitive environment.