What’s It Worth?
Everything has a value. Today, more than ever, it is important to know what it’s all worth. As a business owner, it is important to know the true market value of your machinery and equipment for a whole host of reasons, such as insurance and business valuation. It is relatively simple to determine the value of a farm tractor or an out-of-the-box piece of equipment. An appraiser will look at various factors to determine value, including its original price, wear and tear, depreciation, and current market value. It is a straightforward process because there are millions of pieces of equipment against which they can be compared to determine fair market value. However, it is much more difficult to determine the value of custom-made equipment such as dies, molds, or custom machinery.
An appraiser must take into account that such equipment may be one of a kind, which makes it more difficult to value because there are no other pieces against which to compare it. A whole host of considerations must be taken, including the cost of its production, the value of its usage, the cost of its replacement, depreciation, salvage value, and scrap value. The appraisal of custom equipment requires the specialized skills of a professional who has the expertise and certification to examine all of these factors and more to determine its true fair market value.
Whether you need to know the fair market value or other standards of value such as liquidation value, salvage value, or replacement cost, it makes good financial sense to obtain a credible certified equipment appraisal report that will hold up under scrutiny with financial institutions, government agencies, buyers, sellers, shareholders, or partners. Make sure you know what it’s worth.