Section 824 IAC 2-4-8 - Net worth and market appraisalsAuthority: IC 26-3-7-3
Affected: IC 26-3-7-16
Sec. 8.
(a) In determining a licensee's net worth, the following shall apply: (1) Capital equity of the licensee, including capital stock, shall not be considered a liability.(2) Assets of a licensee shall be subject to associated liabilities connected with any licensed facilities operated by him.(3) Assets shall be valued at cost less depreciation, if depreciable, provided that no insurable asset shall be valued at an amount greater than the amount of insurance that is carried on it.(b) When there are loans to related parties or owners in a licensee's financial statement, the agency may require additional financial statements from the related parties or owners, but the financial statements of the related parties or owners are not required to be reviewed.(c) In calculating the licensee's net worth, the director may utilize the fair market value or market appraisal of the licensee's assets as determined and certified by a competent and disinterested appraiser.(d) Complete current narrative market value appraisals of land, building, and equipment will be acceptable if prepared by one (1) of the following:(1) An independent appraiser certified by a recognized appraisal society or professional appraisal organization; or(2) Local professional realtor, for land values only, if the appraisal contains: (A) a minimum of two (2) quotes of recent sales of similar properties; and(B) a statement of the appraiser's qualifications.(e) Acceptance of appraised values shall be subject to the following:(1) Values claimed for depreciable fixed assets will not be allowed in excess of insured values.(2) Licensee must maintain a current asset to current liability ratio of one (1) to one (1) or better.(3) Current acquisition of assets by the licensee through arm's length transactions between disinterested parties will not be eligible for consideration at appraised values.(4) Licensee's accountant will be required to review the appraisal report and furnish the book value of the appraised assets as of the current fiscal year end financial statement date.(5) If needed to meet the net worth requirement, a market appraisal may be used for five (5) consecutive years before an updated current appraisal is required.(f) The amount of the market appraisal that can be allowed to meet the net worth requirement shall be seventy percent (70%) of the appraised value less the book value.Indiana Grain Buyers and Warehouse Licensing Agency; 824 IAC 2-4-8; filed Jan 19, 2001, 3:04 p.m.: 24 IR 1656; readopted filed Nov 16, 2007, 2:00 p.m.: 20071212-IR-824070667RFA; readopted filed November 27, 2013, 1:30 p.m.: 20131225-IR-824130492RFAReadopted filed 11/1/2019, 10:20 a.m.: 20191127-IR-824190178RFA