What We Appraised on Our Summer Vacation

We have written a number of blog posts on machinery and equipment appraisals, including What’s It Worth? and Certified Machinery and Equipment Appraisal. We have talked about the complexities of appraisals for custom-made equipment, such as dies, molds, or custom machinery, and the importance of working with an experienced appraisal company to ensure that you know the value of all your machinery and equipment.

Recently at Present Value, we have worked on some fascinating appraisal projects that we thought might of interest to our readers and also show the breadth of businesses that we work with on a daily basis.

The first project of interest was a radiology clinic, where we appraised the various X-RAY, CAT-scan, and MRI machines that comprise the assets of the business. Another cool project was at a construction company. In this case, we appraised all of the large earth-moving equipment – backhoes, front-end loaders, and dump trucks – and smaller equipment like Bobcats. One of the most fun projects was for a movie theater company that had a dozen theaters and one IMAX theater that we appraised.

Although these projects varied widely in scope and by industry, they demonstrate that understanding the value of machinery and equipment assets are of paramount importance to any business.

By: Present Value

Tags: certified machinery and equipment appraisal, Machinery & Equipment, machinery & equipment appraisals, Machinery and equipment appraisal, present value
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Valuing Intellectual Property

For many businesses, intellectual property (IP) assets, such as patents, trademarks, copyrights, trade secrets, software, customer lists, and research, are an important part of their value. Because these assets are intangible, meaning that there is high degree of uncertainty regarding their future worth, it can be extremely difficult to determine their value. However, it is increasingly becoming more necessary for businesses to establish the value of IP assets, including mergers and acquisitions, for tax or litigation purposes, or for an ongoing business valuation, or liquidation.

An accurate valuation of IP assets requires that the appraiser look very carefully at the following factors:

• The nature and size of the market to be served
• The competitive advantages of your asset
• The price customers are willing to pay for your solution and related value proposition
• Costs of implementing the technology or products
• The impact of the technology on the processes used by the business to service its customers
• Length of time before new competition will enter the market

There are three methodologies that generally are used to value IP assets:

• Cost Approach
• Market Approach
• Income/Relief-From-Royalty Approach

There is overlap among these approaches, and an appraiser should use all three of these methodologies to determine the valuation of an IP asset. (We will cover these valuation methodologies in another post.)

Make sure to select a competent appraisal firm that follows recognized standards for the valuation of intellectual property.

By: Present Value

Tags: Intellectual Property, IP assets
Posted in Appraisal Terms, Business Valuation, Custom Appraisal, Intellectual Property, business appraisals | 1 Comment »

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.

Tags: Custom Appraisal, equipment appraisal, Machinary Appraisal
Posted in Custom Appraisal, Machinery & Equipment, Real Estate Appraisal, Tax issues, Uncategorized, Videos, business appraisals | 1 Comment »