RESOLUTION OF THE STATE COMMITTEE OF THE REPUBLIC OF UZBEKISTAN ON MANAGEMENT OF THE STATE-OWNED PROPERTY

of June 14, 2006 No. 01/19-21

About approval of the National standard of the Republic of Uzbekistan of assessment of property of "Measurement base other than market value"

According to the Law of the Republic of Uzbekistan "About estimative activities", the resolution of the President of the Republic of Uzbekistan of April 26, 2006 NPP-335 "About Measures for Enhancement of Activities of the State Property Committee of the Republic of Uzbekistan" and the resolution of the Cabinet of Ministers of the Republic of Uzbekistan of May 8, 2003 the State committee of the Republic of Uzbekistan on management of state-owned property decides N210 "About Licensing of Estimative Activities":

1. Approve the National standard of the Republic of Uzbekistan of property assessment of "The measurement base other than market value" according to appendix.

2. This resolution becomes effective after ten days from the moment of its state registration in the Ministry of Justice of the Republic of Uzbekistan.

Approved by the resolution of the State committee of the Republic of Uzbekistan on management of state-owned property of June 14, 2006 No. 01/19-21

Natsioanlny standard of the Republic of Uzbekistan of property assessment (NSOI 3). "Measurement bases other than market value"

This National standard of assessment of property "The measurement base other than market value" (NSOI N3) is developed on the basis of the Law of the Republic of Uzbekistan "About estimative activities" and is element of normative regulation of estimative activities in the Republic of Uzbekistan.

1. Introduction

The purpose of NSOI N3 is determination and explanation of the bases of cost other than market value, and establishment of standards for their application, and also carrying out distinctions between them and market value.

Market value - the main and most widespread (suitable) base of cost which usually is required for broad range of applications. However alternative measurement bases of cost can be corresponding and demanded under certain circumstances. It is important that both appraisers, and users of their services clearly understood difference of the estimates based on market value from the estimates based on non-market bases and also that influence (if that is available), which distinctions between these concepts can render on possibility of use of cost assessment.

The concept of market value is based on the determined, identified assumptions which are stated in NSOI N2. Other measurement bases require application of various assumptions which shall be clearly identified not to lead to incorrect interpretation of cost assessment.

2. Scope of application

NSOI N3 represents and explains the measurement bases other than market value.

3. Determinations

Investment cost is property value for the specific investor or group of investors at the established or set investment purposes. This subjective concept correlates specific object of property to the specific investor, group of the investors or the organization having particular purposes and/or criteria concerning investment.

The cost of operating plant is the cost of business entirely. This concept implies assessment of continuously functioning organization proceeding from which distribution or razneseniye of "total cost of operating plant" on its components according to their contribution to total cost is possible, however in itself any of these components is not base for market value. Therefore the concept of "the cost of operating plant" can be applied only to property which represents component of business or the organization.

Insurance value - the property value provided by provisions of the insurance contract or policy.

Cost for the purposes of the taxation, or tax (taxable) cost - the cost calculated on the basis of determinations which contain in the corresponding regulatory legal acts of the Republic of Uzbekistan relating to the property taxation. Though in some documents of this sort references to market value as measurement base for the purposes of the taxation are possible, the methods offered for calculation of this cost can yield the results other than market value according to determination in NSOI N2. Therefore it is impossible to consider that cost for the purposes of the taxation (or tax cost) corresponds to the definition of market value given in NSOI N2, if there is no specifying on opposite in regulations of the Republic of Uzbekistan.

Residual cost of replacement - represents the evaluation method based on calculation of the current market value of the parcel of land in case of its existing use in the amount with total costs on replacement (reproduction) of constructions less charges on physical wear and all corresponding forms of impairment (functional, external). The result which is non-market cost type is called residual value of replacement. It depends on potential profitability of property.

Utilization cost - property project cost (except for the parcel of land) when it is considered as set of the materials containing in it for sale, but not for continuation of its use without additional repair and enhancement. This cost can be expressed as gross or as net (less costs for realization); in the latter case it can match "the net value of realization". Anyway the included or excluded components shall be determined.

Salvage value, or cost forced prodazhisumma which receipt, on reasonable grounds, can be expected from sale of property for term, too short to answer time frames for the marketing specified in determination of market value. Assessment of salvage value of property can be based on market value of property taking into account discounting of the need of realization of property, last on factor, in short time because of availability of forcing circumstances, and also additional expenses on content and protection of the specified property.

The cost of consolidation is the any additional value given by merge of two or more interests when the cost of the integrated interest costs more, than the amount of initial interests.

The special buyer is buyer with the interest existing at him in other asset which has commercial, legal or geographical tie with the estimated asset.

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