Present-Day Values:

(a)  Base Value (BV) is the theoretical desk-top appraisal value for market conditions that assume no cyclical impact due to a recessionary trough or an economic peak.  BV assumes “balanced market condition”, willing buyer/seller, and half-life condition on airframe and engine maintenance cycles.

(b)  Fair Market Value (FMV), also called Current Market Value (CMV) is the desktop present value that does take into account real life economic cycle conditions (i.e. cyclical troughs and peaks)..

Future Values:

Future values are normally projected in current dollars.  As such, future value projections entail assumptions as to inflation and new aircraft price escalation factors.

Future values are normally projected as Base Values (BV).

Residual Values:

Residual values are assessed as a function of Nominal Replacement Price (NRP) at the date of valuation.  Residual values cannot be assessed as a function of Original Price, since there may be (or may have been) extreme distortion due to unusually high or very low inflation factors in certain periods.

The use of Nominal Replacement Price ensures comparability for all manufacturers aircraft products.  JOCR does not use manufacturer list prices, which were escalated at non-uniform levels between 1986 and 1996 – i.e.:      
          Airbus Industries           6.3%
          McDonnell Douglas       5.9%
          Boeing                          5.0%

JOCR has developed a table of Nominal Replacement Prices for commercial jet aircraft, using 1986 prices as a base and escalating such prices at uniform levels –    i.e.: 
          1986 – 1993          4.00% p.a.
          1994 – 1995          3.33% p.a.
          1996 – 2000          2.50% p.a.