VALUATION AND APPRAISAL SERVICES

VALUATION AND APPRAISAL SERVICES

The Right Answer for Insurable Values Are you getting the right advice to complete your statement of value for insurance placement? A well-advised Statement of Value for insurance placement purposes is beneficial for risk management and can result in significant cost savings for you and your business. At MNP, our team of professional appraisers have comprehensive experience developing cost estimates on a multitude of properties, contents and equipment assets, as well as managing appraisal programs for larger entities. Reasons to Obtain an Estimate of Insurable Value Knowing the exact requirements of your insurance policy can protect you against inadequate coverage while avoiding paying excess premiums. The stress of a loss can be greatly diminished with a complete documented asset listing. MNP s Valuation and Appraisal team will work with your insurance provider to ensure an accurate statement of value for insurance placement consistent with your policy. Our professional appraisers have the highest level of qualifications and necessary experience to determine value. MNP also maintains work files for at least seven years after completion of the assignment, which means you have access to readily available and reliable documentation in the event of a loss. Premise of Value Insurance appraisals assist in completing the Statement of Value for insurance coverage that will indemnify the insured against loss. The Premise of Value is a matter to be consistent with the specific insurance policy. Costing is primarily based on estimating Replacement Cost New. If the circumstance presents itself, however, we can complete the estimate of Reproduction Cost New for example, in the case of a character or historic building, fine arts, sculptures and murals. Some policies require Insurance Value Depreciated or Actual Cash Value. The value estimate we provide will be consistent with your policy.

MNP s Approach MNP s valuation specialists approach each engagement by developing a thorough understanding of your needs right from the start. From there, project planning determines the scope of work, overall timing and scheduling which leads to a discussion on the quantity and format of the deliverables. in general, our process proceeds as follows: 1. Determine appraisal inclusions and exclusions in detail, in conjunction with a review of the requirements of the insurance policy. 2. Discuss optimal timing of site visit, safety and security standards and site contact(s) information for the inspection. 3. Review your existing records; (maintenance and / or accounting), building layout diagram, blueprints, plans and construction related data for the building facility. 4. Physical inspection of building structure, including: a) An internal and external inspection of the building structure or leasehold improvements, inclusive of a series of photographs (subject to any sensitivity); b) Gather / confirm details on structural components, identify the age of the structure(s), measure dimensions; c) Seek information pertaining to the use and history of the property through discussions with the on-site representative and observation; d) Inventory site improvements such as roadways, parking areas, landscaping, outdoor lighting and fencing (optional); 5. Physical Inspection of machinery and equipment, including: a) A physical inspection of a reasonable sample of the equipment or fixtures. b) Review the asset listing provided from your internal records that outlines the model, age, capacity, etc. of the equipment assets (we will amend the listing as required to ensure a complete and accurate inventory of assets); 6. Complete a detailed listing of each building and the building components thereof. 7. Complete a detailed listing of contents or equipment assets within each building and facility, documenting the make, model and serial numbers as appropriate and referencing their location. 8. Estimate the Replacement Cost for each building structure utilizing the Segmented Cost Method in the Marshall Valuation Service Costing Manual. As part of this process, we will (subject to agreement and provisions in the insurance policy) separate some underground building components that are rarely destroyed in fire. We will utilize other published costing manuals to cross-check the costs estimates, including RSMeans / Reed Construction Data publications and the Cuthbert Smith Construction Cost Guide, as well as information we obtain from local contractors.

9. Estimate the replacement cost of site improvements using similar resources. The preferred costing method for this classification is to utilize a square foot cost allowance, consistent with the occupancy (optional). 10. Investigate current building codes with respect to significant enhancement requirements for new structures, accounting for potential additional costs that might be incurred in the event of reconstruction; focusing on fire protection requirements (fire sprinklers / fire walls) and access (ramps, elevators) (optional). 11. Review land use bylaws restrictions to determine compliance of the structures, particularly in terms of parking requirements (optional). 12. Estimate cost of demolition and debris removal of building structures in the event of a loss. The preferred model is based on the assumption of a 60% loss factor with 40% of the building components requiring demolition and debris removal to facilitate reconstruction (optional). 13. Estimate the replacement cost of building contents and equipment assets by contacting suppliers, referencing catalogues and websites and referencing our in-house database. Market knowledge is critical in determining the closest replacement asset available in terms of utility. 14. Rigorous review of the market to determine installation costs and indirect costs related to having the equipment assets back into operation. 15. Complete a detailed reporting of the appraisal process and conclusions. Our work is in conformance with the standards set forth by the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) and the Uniform Standards of Professional Appraisal Practices (USPAP).

Advice You Can Rely On We are designated professionals that adhere only to best practices. Building structures are appraised by senior accredited members; Accredited Appraiser of the Canadian Institute ( AACI ); of the Appraisal Institute of Canada*. *Founded in 1938, the Appraisal Institute of Canada ( AIC ) is the premier real property valuation association in Canada. AIC members are highly qualified valuation professionals who undertake a rigorous program of professional studies, examination and experience before being granted a designation. All contents (machinery and equipment) being valued will be completed by a senior accredited member of the American Society of Appraisers** as well as a member of the Royal Institute of Chartered Surveyors***. **American Society of Appraisers ( ASA ) accredited appraisers are experts. The meticulous ASA accreditation process ensures that ASAaccredited appraisers are accurate, impartial, and credible. They are educated and experienced in their fields and are respected members of their communities. They can deliver independent valuations that assure your property is appraised at its fair market value. ***Royal Institute of Chartered Surveyors ( RICS ) is the world s leading professional body for qualifications and standards in land, property and construction. As people, governments, banks and commercial organizations continue to demand more assurance of certified standards and ethics, attaining RICS status is the recognized mark of property professionalism. We have experience in completing appraisals across the globe for some of the largest insurance companies. We understand their policies and tailor our product to conform to their needs while being specific to the insurance policy.

ABOUT MNP MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world. For more information on our Valuation & Appraisal Services contact Chris Perret, B.Comm, MRICS, AACI, CBV at 403.488.5792 or chris.perret@mnp.ca or Paul Leung, ASA, MRICS at 780.401.7079 or paul.leung@mnp.ca Visit us at MNP.ca Praxity AISBL is a global alliance of independent firms. Organised as an international not-for-profit entity under Belgium law, Praxity has its executive office in Epsom. Praxity Global Alliance Limited is a not-for-profit company registered in England and Wales, limited by guarantee, and has its registered office in England. As an Alliance, Praxity does not practice the profession of public accountancy or provide audit, tax, consulting or other professional services of any type to third parties. The Alliance does not constitute a joint venture, partnership or network between participating firms. Because the Alliance firms are independent, Praxity does not guarantee the services or the quality of services provided by participating firms. 0159M-15