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prolonged the French subsidiary's existence until 1987, then took
over its facilities and continued to use them for some of the
same functions for 8 more years, testifies to the importance that
WFGI attached to the image and customer relations that were
associated with the Paris operations.
The assets of the French subsidiary were stated on the
balance sheet at their book value. Although fair market value is
clearly the more appropriate index, there appears to have been no
attempt to appraise them. The discrepancy between book value and
fair market value was likely to be most significant in the case
of the long-term lease. The balance sheet for FY 1984 states its
value as $155,671. This represents the original cost to acquire
the lease, FF 1,445,250, translated into U.S. dollars at the
exchange rate prevailing on September 30, 1984. It does not
reflect the considerable costs incurred to improve the property.
The book value of the improvements at this time, adjusted for
depreciation over nearly 15 years, was still $360,693.
Promotional material, dated January 1985, states the value
of the French subsidiary's leasehold rights as $250,000.
Petitioners now disavow this estimate as puffery. They contend
that because the lease was in its third trimester and possession
of a portion of the premises was in dispute as of the end of
FY 1984, the market value would have been substantially impaired.
We find this argument unconvincing. Inasmuch as the officers of
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