As with many assets, pieces of equipment also often need appraisals. This could be for buying, selling, insuring, transferring, or even just valuing the equipment. If you're going to pay for an equipment appraisal, you should know what to expect.
System Overview
This might seem like a minor topic, but little differences can lead to huge variations in prices. If a system includes unusual features, for example, the machinery appraisal should reflect their present. Likewise, there may be valuation differences before particular models. If there is a high-capacity version of a piece of equipment, for example, you probably don't want to pay the price for that model if you're getting the low-capacity version.
The overview should state the name of the manufacturer, the make and model of the equipment, and anything special about the version you have. If people make common mistakes about two similar pieces of equipment, the overview should explain why the appraiser believes this piece of equipment is one and not the other.
Condition
Especially when it comes to appraising the value of machinery, the condition matters. You need to know how heavily used it is and how that might affect its performance. Likewise, you'll probably want a good idea of how much attention it might need to keep it in working order or to get it there. An appraisal will report everything from aesthetic blemishes to major mechanical failures.
Market Report
An equipment appraisal should make some mention of the current state of the market. Ideally, there will be a thriving market for the piece of equipment as described in the overview section. However, that may not be the case if the specific piece of equipment rarely comes up for sale. An appraiser can look at similar machines on the same tier and within the same industry, though, to expand the assessment. In most cases, they will express either a range or an average for the most recent sales over a period.
Valuation
Ultimately, this is what you want to get at with an equipment appraisal. The valuation states what the appraiser thinks the fair market value of the equipment would be. Notably, they may state a range of possible valuations. In some cases, they may express this as what they'd expect the equipment to sell for at auction. The valuation will give you a good idea of where to set the price in a transaction or how to mark the equipment's value as an asset for tax, reporting, or insurance purposes.
For more information, contact a machinery appraisal company such as Acadian Equipment Appraisal.
