Despite the 16 years elapsed time many elements are still not well understood. These rules are explained below to demonstrate this principle.
Many appraisers compute a yield based upon an annual accounting of a property's income.
Disregard of the periodicity of income may raise serious question of the credibility of an entire report. This could produce a big difference in valuation when capitalizing large numbers. For tax purposes profitability is measured not by the stated annual rate of an instrument but rather by the yield produced. Manipulation of the allocation between principal and interest of a debt instrument can disguise and transfer real income to advantageous reporting between capital gains and ordinary income. So-called abuse of this income shift brought about the imputed interest and principal rules.