Machinery and Equipment Appraisal

Machinery and Equipment Appraisal – Machinery and equipment appraisals are special, given the variety of possibilities in the market for their application. This type of appraisal seeks to determine the value of individual elements or groups of elements, which may be very unique, and which may increase in value depending on if they are grouped together or not.

The location, the state of the asset, the current use are all considerations when completing this type of appraisal. The valuations of machinery and equipment have the following uses: IFRS reporting, purchase or sale, insurance, liquidation, transfer of assets and for internal decision making.

Types

Function of Asset

• Individual (Electrical substations, solar plants)
• Part of a process (Waste lines, oil pipelines)
• All the process (Concrete plant, automotive manufacturing process)

Type of Asset

• Inventory
• Elevators
• Common areas
• Hotel, Resort FF&E (Hotel Fixtures Furniture and Equipment)
• Office fixtures and furniture
• Concrete plants and equipment
• Drilling machines
• Milling machines
• Packaging machines
• Grinders
• Cranes (loading, unloading, raw materials, rail yard, shipyard)
• Quality testing machines
• Surface treatment machines (cleaning, polishing, painting, plating)
• Vehicles (construction, trucks, mining)
• Oil and Gas (Drilling rigs, oilfield trucks, well control components, pipelines)

Industry

• Automotive
• Oil and Gas (Oil exploration)
• Textile manufacturing
• Medical device manufacturing
• Aviation and aerospace

Approaches, Relevance

• Market
• Cost (depreciated)
• Income

Value Impacting Factors

• Current usage: continuous, unused
• Marketability: does it work for another user or is it only for the current one
• Location: origin destination, where it is needed where it comes from
• Depreciation: functional, operational

Important Inputs

• Value and date of purchase of component
• Maintenance history
• Use and cost of use

Recent Trends

• Increased inflation and effect on cost of new equipment
• Supply chains and the effect on PP&E costs
• Operating financing for companies (debt and equity)

Deliverable

Narrative Appraisal Report

• Value impacting considerations – summary.
• Purpose, scope, limitations of the report.
• Land description.
• Improvement description.
• Scope of work.
• Highest and best use.
• Approaches to value.
• Reconciliation.
• Certification statement.

Notable Markets