income approach


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income approach

A method of valuing real property by determining the net operating income over the useful life of the property and then translating that number to the present value via a discount rate.The present-value concept depends on the assumption that $1 today is worth more than 10 cents a year for the next 10 years,because of the purchasing power of the $1 to buy other investments that will yield a return over the next 10 years, and because of the effects of inflation, which decreases the amount of goods or services $1 will buy over the years. In order to compensate for these considerations,one would say that the value of 10 cents a year for the next 10 years is worth less than $1 today.How much less is the art and science of discounting.

References in periodicals archive ?
The Minnesota Supreme Court previously affirmed the Tax Court's findings concerning gross building area and its rejection of petitioner's expert's sales comparison approach, but concluded that the Tax Court erred in rejecting petitioner's expert's discounted-cash-flow approach and, consequently, in failing to consider the income approach to value.
So, if a bucket retirement income approach is not an effective enough strategy, what's the solution?
KCP also argued that the tax court should not have separately valued the outlot under the income approach "because the 'outlot' does not produce income whatsoever" and it is not "legally recognized.
The most commonly applied method is the lifetime income approach of Jorgenson and Fraumeni (1989, 1992).
The commercial evaluation contains several approaches to value, including a comparable analysis, income approach and land values.
Valuation of properties that are typically purchased by Investors such as Multiplexes and high-rise office buildings may give greater weight to the Income Approach.
There are three approaches to estimate the GDP: Output or Production approach, Expenditure approach, and Income approach.
Secondly it's your "wants", those additional purchases, such as extra social activities, holidays or a new car and this could be provided by an annuity or a more flexible drawdown income approach.
Focus of the project will be inter alia the following: macroeconomic statistics, including national accounts: government finance statistics, house price index, supply and use tables, GDP by income approach, business and agricultural statistics: warehouse for business statistics, agro-monetary statistics, environmental and forestry statistics, science, technology and innovation statistics: modernise the current statistics system and further align it with EU standards, social statistics: use of administrative sources, creation of address register.
The income approach, which is sometimes referred to as GDP(I), is calculated by adding up total compensation to employees, gross profits for incorporated and non incorporated firms, and taxes less any subsidies.
An income approach would measure fair value as the current value of future cash flows.
Fourth, the increased small farmer income approach will be a concrete step to achieving inclusive growth.