Nevada Administrative Code

NAC 361.300 “Full cash value” defined. (NRS 360.090, 361.320) “Full cash value” means the amount at which the property would be appraised if taken in payment of a just debt due from a solvent debtor. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.302 “Functional depreciation” defined. (NRS 360.090, 361.320) “Functional depreciation” means the loss of service usefulness or obsolescence due to technological advances or social requirements. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.304 “Generally accepted accounting principles” defined. (NRS 360.090, 361.320) “Generally accepted accounting principles” means those procedures adopted and endorsed by the financial accounting standards board to which auditors certify when filing an audit report. [Tax Co…

NAC 361.306 “Gross addition” defined. (NRS 360.090, 361.320) “Gross addition” means new property added to an existing plant or an improvement in the form of a betterment added to existing property and is usually reported in a dollar amount. [Tax Comm’n, Property Tax Reg. part No.…

NAC 361.308 “Gross income” defined; synonymous with “gross earnings.” (NRS 360.090, 361.320) “Gross income” means the total amount of income received by a natural person before any deductions are taken. The term is synonymous with the term “gross earnings.” [Tax Comm’n, Property …

NAC 361.310 “Historical cost” defined; synonymous with “original cost.” (NRS 360.090, 361.320) “Historical cost” means the first cost of a property item of a public utility regardless of the present owner or interim sales transactions. It usually refers, in the accounting of publ…

NAC 361.312 “Imbedded debt cost” defined. (NRS 360.090, 361.320) “Imbedded debt cost” means the average rate of interest that a company pays for its long-term debt. Basically, it is the amount of the total interest paid on long-term debt during the year divided by the face value …

NAC 361.314 “Inch equivalent” defined. (NRS 360.090, 361.320) “Inch equivalent” means the miles of various sizes of a pipeline converted into an equivalent mileage of 1-inch pipeline. For example, 1 mile of 36-inch pipe is equivalent to 36 miles of 1-inch pipe. [Tax Comm’n, Prope…

NAC 361.316 “Income” defined. (NRS 360.090, 361.320) “Income” means money or other benefits stemming from the ownership of property, generally received on a regular monthly or annual basis. The word “income” used alone has no specific appraisal significance, but must be modified …

NAC 361.318 “Income approach to value” defined. (NRS 360.090, 361.320) “Income approach to value” means the method of appraisement that involves the analysis of the incomes and expenses of income-producing properties and the use of the capitalization of income to produce property…

NAC 361.320 “Indicator of value” defined. (NRS 360.090, 361.320) “Indicator of value” means a conclusion of the worth, expressed in dollars, of a specifically identified item of property (be it a single parcel of land or piece of equipment or an extensive corporate conglomerate) …

NAC 361.322 “Interest rate” defined. (NRS 360.090, 361.320) “Interest rate” means a promised, typically contractual annual percentage rate of interest paid on a debt such as a mortgage note or a contract. Interest is the cost of borrowing money. [Tax Comm’n, Property Tax Reg. par…

NAC 361.324 “Interperiod allocation” defined. (NRS 360.090, 361.320) “Interperiod allocation” means an assignment of expenses to a certain period rather than to the period in which the expenses occurred. Income tax expense is so handled in normalization accounting. [Tax Comm’n, P…

NAC 361.326 “Investment tax credit” defined. (NRS 360.090, 361.320) “Investment tax credit” means a federal income tax incentive intended to encourage capital investment. It is a permanent forgiveness of income tax liability through the direct reduction of tax liability for the y…

NAC 361.328 “Inwood factor or method” defined. (NRS 360.090, 361.320) “Inwood factor or method” means a factor or method used to determine the present value of future earnings. Those earnings are capitalized by using the same risk rate for both the return on and the return of the…

NAC 361.330 “Liberalized depreciation” defined. (NRS 360.090, 361.320) “Liberalized depreciation” means the use of rates of depreciation on property for income tax purposes that amortizes the investment over a shorter time period than its actual useful life. See revenue proceedin…

NAC 361.332 “Load factor” defined. (NRS 360.090, 361.320) “Load factor” means the ratio of the average use, during a specified time interval, to the peak use during the same time interval. It may be calculated on a daily, weekly, monthly or an annual basis. [Tax Comm’n, Property …

NAC 361.334 “Main track” defined. (NRS 360.090, 361.320) “Main track” means the lines or routes of a railroad, whether on the main line or a branch line, as distinguished from yard track, side track or passing track. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.336 “Market value” defined. (NRS 360.090, 361.320) “Market value” means the amount in dollars for which a specific item of property could be sold by a willing seller and be bought by a willing buyer, assuming an arm’s length transaction and reasonable exposure to the mark…

NAC 361.338 “Net additions” defined. (NRS 360.090, 361.320) “Net additions” means the gross additions less the retirements and is usually reported in amounts of dollars. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.340 “Net operating income” defined. (NRS 360.090, 361.320) “Net operating income” means the excess of the revenues of a business enterprise over the expenses of the enterprise, excluding the income from sources other than its regular activities, but before the deduction o…

NAC 361.342 “Normalization accounting” defined. (NRS 360.090, 361.320) “Normalization accounting” means the practice of charging to the current period those expenses related to the current period rather than to the period in which they are actually incurred. A common example is t…

NAC 361.344 “Obsolescence” defined. (NRS 360.090, 361.320) “Obsolescence” means the lessening of value due to causes other than physical causes and may be functional where circumstances internal to the property item render it less desirable or economic where circumstances externa…

NAC 361.346 “Operating expenses” defined. (NRS 360.090, 361.320) “Operating expenses” means the direct expenses incurred in conducting the ordinary major activities of an enterprise, usually excluding nonoperating expenses and income deductions. [Tax Comm’n, Property Tax Reg. par…

NAC 361.348 “Operating revenue” defined; synonymous with “net revenue.” (NRS 360.090, 361.320) “Operating revenue” means the revenue from the operations of the primary business of an enterprise, such as the electric revenues of an electric utility, which is gross sales of goods a…

NAC 361.350 “Original cost” defined. (NRS 360.090, 361.320) “Original cost” means the cost of a property item to the present owner. At times, it is used as an equivalent to the historical cost. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.352 “Possessory interest” defined. (NRS 360.090, 361.320) “Possessory interest” means a type of ownership or partial ownership of the total fee. In financial terminology it is the portion of the equity in a business enterprise which is expressed in terms of dollars invest…

NAC 361.354 “Prepayments for gas” defined. (NRS 360.090, 361.320) “Prepayments for gas” means payments made for gas which will be delivered in less than 1 year. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.356 “Present worth” defined; synonymous with “present value.” (NRS 360.090, 361.320) “Present worth” means the value today of something to be received in the future. It is usually calculated by a discounting process that takes into consideration the time and interest conc…

NAC 361.358 “Price-earnings ratio” defined. (NRS 360.090, 361.320) “Price-earnings ratio” means the ratio of the market price per share of the common stock of a specific company to the earnings per share of common stock of that company during a 12-month period. Typically, the rat…

NAC 361.360 “Rate base” defined. (NRS 360.090, 361.320) “Rate base” means the amount in dollars established by a regulatory agency upon which a return is allowed. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.362 “Rate of capitalization” defined. (NRS 360.090, 361.320) “Rate of capitalization” means the ratio of income to value. Such a rate can vary widely in quality depending upon the elements that are included such as interest, recapture, ad valorem taxes and income taxes. […

NAC 361.364 “Rate of performance” defined. (NRS 360.090, 361.320) “Rate of performance” means the actual income earned compared to an investment in contrast to a rate of return allowed or permitted but not necessarily accomplished. [Tax Comm’n, Property Tax Reg. part No. 15, eff.…

NAC 361.366 “Rate of return” defined. (NRS 360.090, 361.320) “Rate of return” is a general term that means: 1. The yield to an investor variously on the investor’s net investment or on the property value; or 2. The ratio of either the net operating income or the before-tax cash f…

NAC 361.368 “Recapture” defined. (NRS 360.090, 361.320) “Recapture” means the recovery of a capital investment. More specifically, it is the portion of the net operating income or the cash flow that provides for the periodic repayment of invested capital. Recapture may also be ac…

NAC 361.370 “Remaining economic life” defined. (NRS 360.090, 361.320) “Remaining economic life” means the difference between the economic life and the present effective age of an income producing property. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.372 “Replacement cost” defined. (NRS 360.090, 361.320) “Replacement cost” means the cost of acquiring or constructing, at current prices, a property which is the functional equivalent of an existing property. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.374 “Reproduction cost” defined. (NRS 360.090, 361.320) “Reproduction cost” means the cost of acquiring or constructing, at current prices, a property identical to an existing property. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.376 “Reserve life” defined. (NRS 360.090, 361.320) “Reserve life” means an estimated number of years that the gas reserves of a natural gas transmission company will last. For example, the remaining life of a natural gas transmission company would be the estimated number …

NAC 361.378 “Retirement depreciation” defined. (NRS 360.090, 361.320) “Retirement depreciation” means a method of accounting for the total depreciation expense at the date of retirement rather than by systematic additions to a depreciation reserve during the life of the property.…

NAC 361.380 “Return on equity” defined. (NRS 360.090, 361.320) “Return on equity” means the ratio of earnings on the common equity divided by the book value of the common equity interests. [Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

NAC 361.382 “Revenue” defined. (NRS 360.090, 361.320) “Revenue” means the gross dollars received for materials furnished or services rendered. The term is usually used in conjunction with business sales as opposed to the earnings of a natural person. [Tax Comm’n, Property Tax Reg…

NAC 361.384 “Risk” defined. (NRS 360.090, 361.320) “Risk” means the degree of uncertainty regarding the receipt of future income, whether in the form of interest or of net operating income. The higher the risk, the greater the annual percentage rate of return demanded by investor…

NAC 361.386 “Sinking fund” defined. (NRS 360.090, 361.320) “Sinking fund” means the fund to which periodic cash deposits are made for ultimately repaying a debt or replacing an asset. Usually, a sinking fund receives equal periodic deposits upon which interest is compounded at a …

NAC 361.387 “Statistical median” defined. (NRS 360.090, 361.320) “Statistical median” means the representative intermediate value calculated for a distribution or range of data usually grouped in several intervals of equal value lying between the two extreme values. (Added to NAC…

NAC 361.388 “Straight-line depreciation” defined. (NRS 360.090, 361.320) “Straight-line depreciation” means the accounting practice of recording equal annual increments of depreciation over the estimated life of an asset. In an appraisal it means equal annual increments of loss i…

NAC 361.390 “Summation method of valuation” defined. (NRS 360.090, 361.320) “Summation method of valuation” means the combining of fractional valuations into one value such as the addition of the value of a house to the value of the lot to produce a total residential value. [Tax …