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AACI

Accredited Appraiser Canadian Institute designation from the Appraisal Institute of Canada.

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Accrued Depreciation

The difference between an improvement’s cost new and its value as of any given date. Depreciation is defined as a loss in utility and hence values from any cause. There are three (3) types of depreciation: physical deterioration, functional obsolescence and economic obsolescence.

Depreciation can be measured in many ways, such as: - Depreciation Tables: (variant from Sales comparison method) elaborated throughout commercial Cost Manuals (ex: Marshall & Swift). - Sales Comparison Method: based on sales comparable to the subject building. The appraiser determines for each sale the sale price allocation to the building which is then deducted from the estimated reproduction or replacement cost new of building. - Breakdown Method: where each cause of depreciation is analyzed and measured separately for each of the components of the construction based on the appraiser's observations, experience and judgment. The appraiser then totals the estimates to derive a lump-sum figure that is deducted from the estimated reproduction or replacement cost of building. - Economic Age-Life Method: where the ratio between the effective age and total economic life of a building is applied to the cost of improvements. - Allocation Method: which allows the appraiser to identify, to analyze and to measure each cause of depreciation separately. The sum of all types of depreciations (i.e.: physical deterioration, functional obsolescence and economic obsolescence) is then deducted from the estimated reproduction or replacement cost of building.

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Acquittal or Quittance

Written release from which a Creditor declares the debtor is free of any debt, obligation, or penalty towards him. Withdrawal of all mortgage and financial charges from a property.

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Acre

A measure of land equalling 4,840 square yards, or 43,560 square feet.

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Active Asset

An asset that is used by a business in its daily or routine operations. Active assets can be tangible, such as buildings or equipment, or intangible, such as patents or copyrights.

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Ad Valorem

A Latin phrase meaning "according to value". Usually used in connection with real estate taxation.

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Affidavit

An affidavit is a formal sworn statement of fact, signed by the author, who is called the affiant or deponent, and witnessed as to the authenticity of the affiant's signature by a taker of oaths, such as a notary public or commissioner of oaths. The name is Medieval Latin for "he has declared upon oath".

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Air Rights

The rights in real property to the reasonable use of the air space above the surface of the land.

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Alluvium

The gradual increase of the earth on a shore of an ocean or bank of a stream resulting from the action of the water (from the Latin, alluvius, from alluere, "to wash against").

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Amortization

The deduction of capital expenses over a specific period of time usually over the asset's life. It is not a cash outflow. It is an accounting statement of the lessening of the potential of service of an asset caused by wear, obsolescence, or any other causes.

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An act respecting municipal taxation

R.S.Q., chapter F-2.1

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Annual Report

Audited document required by the AMF and sent to a public company's or mutual fund's shareholders at the end of each fiscal year, reporting the financial results for the year (including the balance sheet, income statement, cash flow statement and description of company operations) and commenting on the outlook for the future.

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Applicant

The borrower which requests or seeks a loan.

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Appraisal Methods

When appraising a property, and depending on the type of property, data is sought in the market on such factors as sales and/or offerings of similar improved properties or parcels of vacant pieces of land, as well as current prices at the appraisal date for construction materials and labor, rentals of similar properties and their operating expenses, and current rates of return on income producing properties. From this data, a value may be developed both for the land and its improvements, as a whole.

When applying the three (3) recognised methods in real estate appraisal, we tend to analyse the data in our possession and estimate the probable market value of the subject property.

These methods are as follows: the Cost Approach, the Income Approach and the Direct Comparison Approach.

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Arms Length Transaction

Transaction in which the two parties are unconnected and have no overt common interests. Such a transaction most often reflects the true market value of a property.

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Assemblage

Combining of 2 or more abutting parcels of land.

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Assessment Roll

The assessment roll, which represents the inventory of all properties in a given jurisdiction, indicates the value of each property on the basis of its actual or commercial value, within the meaning of articles 43 to 45 of the L.F.M. It covers all the residential, commercial, industrial, institutional, agricultural and vacant properties. The values which are registered take account of the real market values on July 1st of the second fiscal year preceding the first for which it is conceived.

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Assessment Unit

In municipal assessment, is an assessment unit the largest possible group of immoveables which fulfil the following conditions:

(1) the land or pieces of land belongs to a same owner or a group of undivided owners; (2) the pieces land are contiguous or would be if they were not separated by a river; (3) if the immoveables are used, they are in a same predominant end; and (4) immoveables can normally and on short-term be sold but as a whole and not in parts, considering the most likely use that can be made.

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Assessor

A person with technical expertise called in Court to assist and advise a judge or magistrate and in many instances to act as surrogate. Usually selected for special knowledge in a particular area.

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Asset

A resource with economic value that a corporation or an individual owns or controls with the expectation that it will provide future benefit.

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Assumption

That which is taken to be true.

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Audit

The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. Audits are performed to ascertain the validity and reliability of information; also to provide an assessment of a system's internal control. The goal of an audit is to express an opinion on the person / organization/system (etc) in question, under evaluation based on work done on a test basis.

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