Posts Tagged ‘USPAP’
The 7-Step Scope of Work for a Typical Machinery and Equipment Appraisal
As part of a typical machinery and equipment appraisal, the appraiser will outline the scope of work involved in an assignment. The USPAP (Uniform Standards of Professional Appraisal Practice) has put forth guidelines that machinery and equipment appraisers should include in the scope of work. The minimum standards for scope of work include the expectations of the client and other users and the actions of other appraisers who carry out similar assignments.
When you engage an appraiser, these are the steps that an appraiser typically will take prior to determining the value of your machinery and equipment:
- Identify the assets to be appraised
- Define the purpose of the appraisal
- Establish the valuation date for the appraisal
- Determine the appropriate valuation concepts and approaches to be used
- Determine the type of valuation study to be completed
- Select the type of appraisal report to be provided
- Check the availability of data and information
The scope of work is the first step in any appraisal. Without a specific scope of work, the conclusions of an appraisal may not stand up to scrutiny.
By: Present Value
Additional Reading:
Certified Machinery and Equipment Appraisers: Present Value
Certified Machinery and Equipment Appraisers: Present Value
Present Value has performed an extensive number of machinery and equipment appraisals worldwide. A certified machinery and equipment appraisal is compliant with USPAP standards and the standards of the National Equipment & Business Builders Institute.
Whether you need to know the fair market value, orderly liquidation value, and/or forced liquidation value of your equipment, the professionals at Present Value can provide you with a certified equipment appraisal report in a timely manner at a competitive cost. Our certified equipment appraisals will meet the requirements of financial institutions, government agencies, buyers and sellers, shareholders, and partners. Our experience and expertise extends across all machinery, equipment, and technical specialties. Below are examples of some of the industries in which we specialize:
- Health Care and Medical Industry – Examples of equipment appraised: MRI Imaging Systems, CT Scans, Ultrasound Equipment, Dental Offices, Nursing Homes, Hospital Equipment, Cardiovascular, Ophthalmology, Nuclear Imaging, Orthopedics, Surgical Centers, EP Systems, Physical Therapy Clinics, X-Ray Machines, Advanced PET Systems, PACS Systems, and more.
- Manufacturing Industry – Examples of equipment appraised: Plastics Manufacturing, Machine Shops, Woodworking Equipment, Agriculture Equipment, Routers, Sanders, CNC Equipment, Lathes, Conveyers, Air Compressors, Industrial Tanks, Brake Presses, Extruders, Saws, Planners, Vacuum Pumps, Drill Presses, Benders, Die Cutters, Saws, Molds, Tooling, Cutters, and more.
- Heavy Equipment and Construction Industry – Examples of equipment appraised: All Yellow Iron, Excavators, Compressors, Stackers, Aerial Lifts, Crushers, Spreaders, Backhoes, Cranes, Dozers, Rigging Equipment, Skid Loaders, Shop Equipment, Oil Field Equipment, Asphalt Plants, Washing Equipment, Incinerators, Drilling Equipment, Generators, Railroad Equipment, Tractors, Trucks, Trailers, Environmental and Recycling Equipment, Sweepers, Soil Stabilization Equipment, Aggregate Equipment, and more.
By: Present Value
Additional reading:
New USPAP Changes Effective January 1, 2010
As we discussed in a post in June, The Appraisal Foundation, a congressionally authorized non-profit organization that fosters professionalism among appraisers by setting qualifications and standards, announced that its Appraisal Standards Board (ASB) adopted revisions for the 2010-2011 edition of the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP are the generally accepted performance and ethical standards for the appraisal profession in the United States. Standards are included for real estate, personal property, business, and mass appraisal. And, these changes go into effect on January 1, 2010.
The Appraisal Foundation has issued a question and answer document that is designed to help answer any questions that might arise. You can visit their website to learn more about all of the changes.
In particular, they have highlighted one revision to USPAP that will affect each assignment starting in 2010. Appraisers will be required to disclose to their client, prior to engagement and in the certification of appraisal reports, “any services regarding the subject property performed by the appraiser within the prior three years, as an appraiser or in any other capacity.”
As always, Present Value is USPAP compliant.
By: Present Value
Scope of Work
The USPAP (Uniform Standards of Professional Appraisal Practice) has always required that real estate appraisers show the scope of work required for credible results. But in recent years, it was found that appraisers did not fully understand this process, so USPAP was updated in 2006 with a new scope of work rule. The rule requires that the minimum standards for scope of work are a) expectations of the client and other users, and b) the actions of other appraisers who carry out similar assignments. The rule also states that appraisers need to identify six components of the appraisal before the actual appraisal begins:
- The client requesting the appraisal
- The intended use of the appraisal report
- The value (market, foreclosure, investment)
- Any hypothetical conditions or assumptions
- The date of the appraisal report
- The relevant features of the property
Using these components, the appraiser identifies the scope of work.
The scope of work is the first step in any appraisal. Without a specific scope of work, the conclusions of an appraisal may not be viable. By defining the scope of work, an appraiser can develop a value for a property, which is the intended use of the appraisal.
By: Present Value
Certified Machinery and Equipment Appraisal
We have written a number of blog posts about machinery and equipment appraisals, including Common Types of Appraisal Reports, What’s It Worth?, and Insurable Value. In this post we will cover what should be included in a certified machinery and equipment appraisal (CMEA) report.
A certified machinery and equipment appraisal is a comprehensive and detailed appraisal report that provides an accurate and descriptive account of the value of specific machinery and equipment. CMEA reports include photographs, model numbers, serial numbers, and other descriptive information about the machinery and/or equipment. To determine the worth of machinery and equipment, an appraiser determines the value of equipment based on research, personal inspection, and contact with manufacturers and suppliers.
A CMEA should meet the standards set by the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP), so that your certified equipment appraisal report will hold up under scrutiny from financial institutions, government agencies, buyers, sellers, shareholders, or partners.
By: Present Value
The Appraisal Foundation Announces 2010-2011 Edition of USPAP
On June 9, 2009, The Appraisal Foundation, a congressionally authorized nonprofit organization that fosters professionalism among appraisers by setting qualifications and standards, announced that its Appraisal Standards Board (ASB) adopted revisions for the 2010-2011 edition of the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP are the generally accepted performance and ethical standards for the appraisal profession in the United States. Standards are included for real estate, personal property, business, and mass appraisal.
The new edition is expected to be available in October. However, ASB has issued a Summary of Action that will enable appraisers to become familiar with the changes that are part of the 2010-2011 edition. The changes will take effect on January 1, 2010.
The majority of revisions were made to the ETHICS RULE, the COMPETENCY RULE and STANDARD 3: Appraisal Review, Development and Reporting.
Two of the most significant changes are as follows:
- “A requirement was added to the Conduct section of the ETHICS RULE, stating that, prior to accepting an assignment (and if discovered at any time during the assignment), an appraiser must disclose to the client and in the report certification any services regarding the subject property performed by the appraiser within the prior three years, as an appraiser or in any other capacity.”
- “The appraiser’s obligation to allow a client access to his or her workfile when providing a Restricted Use Appraisal Report was removed.”
Present Value is a certified appraisal company and provides USPAP-compliant appraisal reports.
By: Present Value
Why use a certified appraiser?
A survey was recently conducted at an American Institute of Certified Public Accountants Conference in which more than 100 CPAs said that when assigning value to a business’s tangible assets, like machinery, one of the biggest problems they face is liability risk as a result of invalid information. This is one of the reasons why it’s important to have a certified appraiser research and assess your business’s assets and compose a reliable valuation report.
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