How do you value DVC as an asset?

[Mickmse2002]

I have to do a personal financial statement and want to be able to include our two DVC contracts as assets. What is the simplest way to accurately assess this? I was going to list what seems to be the going resale rate of around $72 per point.

 

[Beth]

I don't know the right way to do it, either.

I have mine valued at $65/point - to be on the conservative side.

I guess a good thought would be to value them at the going price that's not passing ROFR - which could vary from resort to resort.

 

[FLYNZ4]

Originally posted by Mickmse2002
I have to do a personal financial statement and want to be able to include our two DVC contracts as assets. What is the simplest way to accurately assess this? I was going to list what seems to be the going resale rate of around $72 per point.

I would think that you would need to deduct the cost of brokers fees... assuming that you would sell through a broker. I would think it would be safe to deduct 20%... but I've never sold so I am not sure.

/Jim

 

[Mickmse2002]

Thanks for the reply. I have no intention of selling, I just have to come up with what a fair market value is and have seen lots of different and very confusing formulas in different threads.

 

[SoCalKDG]

No reason to deduct brokers fees since it isn't required that you use a broker.

When we value/appraise a house, 6% for realtor fees isn't deducted. This would work much the same way.

 

[BostonDisneyKid]

I believe it is actually an expense, not an asset, much like a car. It has a fixed life cycle and no actual value other than whatever someone is willing to pay for it as opposed to having a fixed value. I may be wrong as I am no accountant but I believe it would be classified as an expense not an asset.

 

[Mickmse2002]

Now I'm confused. Isn't it both an asset and an expense. I have a deed somewhere that says I own a very small percentage of a tangible place. I have a monthly expense (dues) to maintain the asset. If I can sell my 400 points for somewhere in the neighborhood of $28K shouldn't it be treated as an asset? But like you, I am certainly no accountant.

 

[JimC]

It is an asset. The contracts represent a prepaid right to use vacation plan for a fixed period of time. A prepaid expense in accounting terms. I would value it at cost and amortize the cost over the remaining life of the contract (using the total number of points acquired as the denominator). With each reservation reduce the value of the asset accordingly.

 

[Mike]

Originally posted by BostonDisneyKid
I believe it is actually an expense, not an asset, much like a car. It has a fixed life cycle and no actual value other than whatever someone is willing to pay for it as opposed to having a fixed value. I may be wrong as I am no accountant but I believe it would be classified as an expense not an asset.

A car is an asset as well ... albeit one that declines in value every year and has expenses associated with it. But it is still an asset.

 

[DBBN]

We use $65.00 per point for our OKW points when calculating our net worth. This is our opinion of value...we'll know exactly the value when and if we ever sell some or all of them. Until then we'll continue to have an opinion of value based on resale data and with full knowledge that value will CERTAINLY decrease sometime in the future. Exectly when the decrease will come is unknown.

 

[BostonDisneyKid]

I just called a friend who is an IRS Auditor as I was very curious about this and he states, "It can be classified as either an asset or an expense. It is an asset because there is a value ... but, it is an expense as it has associated costs and has no predetermined value but yet a value none the less."

 

[Mickmse2002]

Thanks for all the input. I will list it as an asset.

 

[Pa@okw95]

You really do not own a piece of property like a car or other real estate. You have pre paid for vacations with WDW and that has a value. I don't think they would be viewed as an asset by a bank for a loan. Don't be fooled by the deed situation. If you are trying to figure your net worth, you might consider them an assest or like someone else said a pre-paid expense.

 

[SoCalKDG]

If you were going through a bankruptcy, would it be liquidated to pay off debt. If yes, than I can't see how it couldn't be considered an asset. I think of anything that can be resold as an asset. What does a loan company think of it as, thats the question.

 

[msdis]

Anything that has a "value" goes on the asset side for accounting purposes.