The quarter also reflects significantly lower provision for loan loss and disposition costs
of real estate owned, USD268,000 and USD172,000 respectively.
Thus far, said the company in a statement, the program has resulted in relatively low case disposition costs
and a high percentage of dismissals with no payment.
The court calculated the inventory's adjusted replacement cost by deducting disposition costs
and an allowance for the profit a willing buyer would expect from the inventory's aggregate retail catalog prices.
If the fair value of the asset (less any disposition costs
) exceeds the book value of the asset, no impairment loss recognition is necessary; if the fair value of the asset (less any disposition costs
) is less than the book value of the asset, an impairment loss should be recognized in income from continuing operations and the asset should be written down to its fair value.
On the other hand, for cases in which forbearance has been granted, recorded disposition costs fail to include the opportunity cost of the risk capital the government provided to unsuccessful and recovering thrifts during their period of extended insolvency.
High and rising disposition costs indicate an increasing private disinterest in many of the hard-to-value assets and franchises FSLIC had available to sell.
Neglecting uncollected financing fees on FSLIC's forbearance equity, lines (7) and (9) of Table 2 estimate incremental liquidation and flexible-resolution costs using the annual average per-dollar disposition costs summarized in line (6).
Finally, using the average of the lowest disposition rates that Barth, Bartholomew and Labich (1990) observe between 1985 and 1991, line (4) assumes that net disposition costs are 15% in all years.
Delays may lead gross and net disposition cost to appear larger ex post than would have been experienced with a policy that routinely resolved insolvent cases promptly.
Lovell defines disposition costs as "all direct costs incurred as a result of the final disposition of an asset.
For certain loans, financial institution users of appraisal reports need to estimate the disposition costs to assist in estimating internal write-downs.