Nev. Admin. Code § 361.408 — 361.408

NAC 361.408    Indicators of value: Cost approach; income approach; market or
stock and debt approach; reconciliation. ( NRS
360.090 , 361.320 )
1.  The cost approach consists of that cost
of all operating assets subject to the ad valorem property tax pursuant to NRS 361.315 and 361.320 that most closely reflects
the taxable value of these operating assets.
2.  For the income approach, the adjusted net
operating income either after or before an allowance for depreciation and
federal income tax will be capitalized (converted to value) through the use of
an appropriate capitalization rate for the industry group. The income of the
property to be capitalized will be determined as follows:
(a) With regard to those industry groups in which
annual earnings are reasonably stable, the most recent year’s earnings may be
capitalized.
(b) For those industry groups in which annual
earnings vacillate frequently over a period of years, an average of past
earnings may be used.
3.  The market approach or stock and debt
method of valuation is a technique that is applicable to valuing railroads and
utilities, and it results initially in an enterprise value which encompasses
the entire unit. The stock and debt indicator will be determined by multiplying
either the average monthly, quarterly or annual high and low market price
quotations of all the securities which are actively traded in the market place
including common stock, preferred stock and long-term debt, by the number of
shares outstanding at the end of the year. With regard to those securities
which are not actively traded, computations of the present worth of the income
flows may be made for the determination of their value. To this amount will be
added short-term debt, together with other applicable adjustments. From this
amount will be deducted the nonoperating and nonassessable assets for the
indication of the value of those assets encompassed within NRS 361.315 and 361.320 .
4.  A review will be made of the one or more
available indicators of value. These indicators of value will then be
reconciled to derive the final estimate of value.
[Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79;
A 10-15-81]—(NAC A 9-30-88; R085-98, 11-23-98)