When you have used machinery, how do you figure out what it's worth? You have a few different options available, but only one really solid one. Used equipment values can vary widely, with a number of different sources, but how do you make sure that your equipment value is as accurate as possible? Here's a quick look at different ways you can have your equipment valued, along with the benefits and drawbacks of each method.

How do you accurately determine used equipment values?

So what are the different ways you can have your equipment valued? You could take a good look through online or live auctions, classified ads, magazines or similar markets to see if you could find the same or similar equipment. You could talk to your local dealer and find out how much they would give you for the equipment on trade. You could pay to an equipment appraiser to determine the value of your equipment. Though each of these approaches would give you a value for your equipment, only one of these would be accurate.

Equipment that is being offered for sale is priced based on how quickly the seller wants to move the equipment. If they're going for a quick sale, they may try to low ball the price or put on a fast paint job to hide years of abuse. If they're really not that enthused about trying to get rid of the equipment, they may price it high so that they're only getting rid of it for the price they want.

A dealer may offer you a price based on whether they need to sell new equipment or want to deal with the hassle of trading in used equipment. If they need to make a sale to improve their commissions for the month, they may offer you a much higher value than your equipment is really worth. If, on the other hand, they have a decent paycheck coming up and don't want to deal with the hassle of handling your used equipment, they may offer you significantly lower than it's actually worth.

Though you need to pay for an equipment appraisal, it actually provides you with the most value. An equipment appraiser deals with similar machinery every day can tell what kind of condition your machinery is in, and may even be able to recommend repairs to help improve the value. They take into account your industry's current condition, helping you determine whether you should sell your equipment outside of your region due to a localized slump. The valuation report they produce uses standardized methodologies to determine the value of your machinery, which means it will stand up well to very strong scrutiny if you're getting a loan or facing an insurance loss, incorrect tax assessment or a lawsuit.

Though there are a number of different ways you can calculate used equipment values, getting the accuracy you need for most purposes can only be found when you work with a certified equipment appraiser. Because of their level of training, expertise and experience, certified appraisers are able to calculate values and produce valuation reports that stand up well to the strongest of scrutiny, including legal, financial, insurance and tax agency circles. Working with a certified appraiser is the best way to ensure you're getting your money's worth out of your equipment valuation.

When you're buying a business or a large lot of equipment, it can be difficult to determine how to allocate value across the assets. How do you determine how much of the value you've paid for the equipment should go to each piece of machinery? One of the easiest ways to make this work is through an equipment appraisal for asset allocation, which uses the values from the appraisal report created by a certified equipment appraiser to determine the overall value and how it should be spread across a number of different pieces of machinery.

How to use an equipment appraisal for asset allocation

Let's take a look at a possible scenario that is fairly common when a large lot of mixed equipment is purchased. A business needs to expand quickly and so buys out a bunch of equipment from a competitor. Though the equipment is worth a particular amount as a lot, it's hard to determine the value of each type of equipment, never mind each piece. How do you divide the cost of all the equipment up among the different pieces of machinery in a fair, equitable fashion?

One of the easiest ways to determine how to allocate asset value is by having an equipment appraisal performed. When an overall valuation is performed, the valuation specialist looks at all the equipment you've purchased, which allows them to pick out differences between not only different types of machinery, but also individual pieces of equipment within that model. They can tell you when a particular piece of machinery has a lower value because it has damage or excessive wear. They're able to mention when a particular part of a lot has a higher value because it has an optional feature that wasn't included in the other machinery.

Once the appraiser has had the opportunity to review and examine all the machinery, they can create an overall report that sums up the total value as well as the individual value of each piece of machinery. A certified equipment appraiser used a series of standardized methodologies to calculate the exact value of the machinery. The certification process ensures that a certified appraiser has the knowledge, experience and expertise to determine the machinery's value accurately.

An equipment appraiser deals with nothing but machinery all day, allowing them to see how one piece of machinery compares to another. This gives them a unique insight to see every possible item that may affect its value, whether it's a stain from liquid that indicates a leak or drip, a bit of metal scraped free of paint that indicates a pulley out of alignment or a slightly different sheen to the paint that indicates repaired damage. Any of these signs can show you where any number of issues can come into play in the future use of your equipment, allowing you to make repairs as needed.

The process of allocating assets in your business can seem like a complicated process, but using an equipment appraisal for asset allocation provides you with a fair value for your equipment, making the process go much more easily. It also provides you with a background value for your machinery, providing you with a solid proof of value should you suffer any losses for your insurance company or need to prove the value of the machinery for legal, financial or tax purposes. 

Natural disasters are getting more costly for businesses—and scientific studies suggest these disasters will only be more prevalent going forward, with this century forecast to see a 40 percent increase in tropical storms rated Category 3 to 5. The best way to protect your business assets from a natural disaster is to purchase sufficient business insurance—and this means getting your industrial equipment appraised. Find out how industrial equipment appraisals protect your valuable assets during a natural disaster. 

If you don't have insurance that covers your industrial equipment, you will be forced to pay for replacement equipment out of hand. Many businesses are forced into bankruptcy after a devastating event, such as a fire or flood, because they do not have the capital to replace the equipment they need to fulfill orders. Studies estimate that 40 percent of small business never reopen after a natural disaster. 

Before you can purchase insurance for your assets, you need to understand your risk. What types of natural disasters occur where you do business? Are there other incidents that are uncommon, but may happen? 

Consider that hurricanes typically affect coastal areas, but they don't always stick to the seaboard. While you may be at low risk of a hurricane, since these storms are relatively rare, it may make sense to buy hurricane protection because a single storm could wipe out your facility overnight. 

Next, determine your tolerance level for risk. Would you prefer to protect your business against all foreseeable hazards, or do you want to stick with coverage for the most common incidents that affect your area? 

Review your insurance coverage, paying special attention to policy exclusions. Insurance policies often exclude earthquakes for facilities that lie near fault lines. With hurricanes, some damage may be covered by business property insurance while other types of damage are excluded. For instance, policies treat hurricane rain differently when it's falling and on the ground. Once rain hits the ground, insurance companies consider it flood water, rather than part of the hurricane. They may then refuse to cover damage to your industrial equipment unless it was damaged before the rain hit the ground (for instance, if it came through a broken window). 

You may purchase supplementary insurance to cover these gaps or exclusions, safeguarding your assets and ensuring replacement in the event of disaster. 

To buy insurance, however, you need to know how much insurance you need—and that's where the industrial appraisal comes in. An industrial appraisal provides an accurate valuation for your equipment so you know exactly how much it would cost if you needed to replace, say, a hoist. 

There are different ways to value equipment. An appraiser might determine what it would cost to replace your industrial equipment by comparison shopping for used equipment of a similar make and model or by gauging the new replacement cost of a similar asset, then factoring in the indirect costs of ownership (e.g. maintenance, labor, and tax). 

Recent sales transactions shine a light on market value for a given item, so some appraisers take the market value by looking at recent sales databases or auction houses. 

Any method that delivers an accurate cost estimate of your critical equipment is acceptable. 

You never know when your area will be hit with fires, floods, or storms. To be safe, get all of your mission critical industrial equipment appraised as soon as it's convenient to get losses covered during the next natural disaster that affects your area. 

In a divorce, spouses split marital assets. While you may think of this in reference to personal assets, it also refers to business assets. If you own a business, your spouse may be entitled to up to half of the business's worth. To determine this worth, equipment valuation for divorce purposes is essential. Here's what you can expect when getting business equipment valued in cases of divorce. 

Why Appraise Equipment Before a Divorce

During a divorce, you must split the marital assets with your soon to be ex spouse. While it may be easy enough to assess the value of your home or car, gauging the worth of your business assets is trickier. An appraiser can estimate the value of your business by comparing it to your closest competitors. Equipment valuation methods help an appraiser determine the fair market value of business equipment. From this valuation, a judge or mediator can determine how much money your spouse is entitled to, by law. 

Valuing equipment for divorce purposes is the easiest way to determine your spouse's allotment, but it also benefits you. You want lower appraisal values for equipment where your spouse will want higher values. An appraiser can fairly assess business equipment without favoring either side. 

Divorce cases often turn acrimonious as partners fight over division of property, child custody, and other matters. As these cases drag on, legal fees mount. So do stress and tension. By letting an appraiser determine the worth of your business and equipment, you can reduce your stress and save both time and money. 

What to Expect When Valuing Equipment for Divorce Purposes 

When you schedule an appraisal, a certified appraiser will come out to your business. They will inspect the premises and take photos or videos of your equipment. An appraiser might ask to see a maintenance log or note the make, model, and condition of your business assets. A skilled appraiser will be thorough in their inspection, taking even the small tools and furniture into account. 

The appraiser will then review this information, perform independent research, and deliver an equipment valuation which you can use for divorce purposes. 

You may use a single appraiser for divorce purposes or each party may retain their own appraiser. It depends on how amicable the divorce process is. 

It is essential that you hire a certified appraiser when taking equipment values for divorce, as an appraiser who is not certified is viewed as suspect by the court.

A dealer, auctioneer, or other party should be avoided for valuation as well, as they may not have an independent, unbiased opinion of equipment value. Consider that an auctioneer who lowballs your construction business assets -- reducing the amount of money you have to give your soon to be ex spouse -- may hope to make a tidy profit by buying the equipment off you for a song. 

Certified appraisers have experience conducting appraisals for legal purposes, and many have previous experience testifying under oath. If your appraiser has to take the stand, this comfort can make the difference between a valuation that stands up in court and one that crumbles under cross-examination. 

Start searching for a certified appraiser who understands your industry as soon as you know you will be getting divorced. This gives you time to identify the right person, who can value your equipment fairly and assist with the division of marital assets as required by law. 

When you work in the oil and gas industry, you know that market fluctuations can have a strong impact on your bottom line. As prices change, you decide what equipment But did you know that appraising oilfield equipment can help you make smart decisions for your company's future? Here's a quick overview of why it's important to have your oilfield equipment appraised regularly and how this information can provide strong benefits for your business.

Keep on top of changes in the market by appraising oilfield equipment

When market prices change, you may choose to put assets into or out of use based on a wide range of factors that impact cost and price. But when you don't know the value of your equipment, it can be very difficult to determine when that machinery should be put into action or held back to preserve value. But that's not the only area where your machinery values should be considered.

What about when the next big oilfield is discovered and you're in a good position to take advantage of the situation? If you need to quickly take advantage of the situation,  what assets can you leverage to ensure you can secure the financing you need for fast growth? A financial institution may not see the full value of your equipment or may take time to determine the value, costing you valuable days or weeks before you can take advantage of the opportunity. However, having a valuation report already on hand from a certified equipment appraiser allows the financial institution to move more quickly in approving your loan, giving you more time to position your company and start production.

Another area where equipment valuation can help in a boom is by providing you with a solid value for that particular piece of machinery. Instead of being gouged by an equipment sales rep who is inflating prices to take advantage of the situation, you can come to the negotiating table with a firm grasp of exactly what the equipment is worth. This allows you to negotiate from a position of strength, even though you may end up paying a slightly higher price instead of waiting on equipment to arrive from across the country.

Once you're on the oilfield working, can you sustain your production levels or will equipment failures cost you your profits? Many people are not aware of a very helpful aspect of equipment valuation. When your equipment is appraised, its value is based at least partially on its condition. That means the appraiser, who spends their time inspecting equipment, can often provide you with a good idea of where the machinery is having issues such as excessive wear, pressure issues and similar problems.

By appraising oilfield equipment regularly, it's much easier for you to make smart decisions about your business, no matter what the market may bear. But who should you have perform the equipment valuation? Though it may be tempting to simply request one from your local equipment dealer or use your last property tax assessment, keep in mind that these sources will not provide you with a solid valuation report that will hold up in legal, financial, insurance and tax circles. Make sure that the appraiser you use is certified, which will provide you with an honest, independent report of your equipment values. 

What's your machine shop worth? If you don't know, perhaps you need an appraisal to get the market value of your machine shop. Explore common reasons for appraising a machine shop today to learn when and why to get an appraisal. 

Keep Up With the Times 

If your shop is not keeping up with market trends, you may not be able to handle your customer's changing needs. Getting a valuation can help you tune-up your machine shop, because it will show you your shop's current value, your equipment's condition and remaining useful life, and current market demand for your assets.

When you know this information, you can stay current with the times by investing in the right pieces of new equipment. For instance, many machine shops understand the demand for additive manufacturing technology, yet few have made the investment in this technology. If you've been thinking of purchasing a 3D printer, a valuation can help you compare your existing assets' value and demand, so you can decide whether to sell underutilized equipment and buy a 3D printer or keep your existing assets and take out a loan for the new equipment. 

Lower Tax Liability 

Are you concerned you're paying too much in taxes? An appraisal can provide an up-to-date valuation of your machine shop, which can lower your tax liability. The money you save on taxes can then be reinvested in your business.

Protect Your Investment

Your machine shop is your livelihood, and if your equipment were damaged in a natural disaster or other incident, you would suffer. In order to protect your investment for business insurance purposes, you need to know the total value of your assets -- and this means you need equipment appraisal for all the big-ticket items in your machine shop.

For smaller items that you may not want appraised, you will need documentation to demonstrate your assets and their condition. Think photos of your equipment, serial numbers, make and model information, and even service records for your equipment. 

An appraisal can show your insurance company exactly how much everything is worth and help you determine how much insurance to purchase. By preparing ahead, you'll be covered whether there's a flood at your facility or an unexpected crash. 

Sell Your Shop 

With the economy doing so well, this is a great time to consider selling a successful machine shop. Maybe you'd like to retire, or maybe you're thinking of moving to another state. A machine shop appraisal will help you understand the worth of your shop so you can take it to market and sell for a fair price. If you're thinking of selling down the road, having your shop appraised now helps you make informed decisions for the next few years. For instance, you'll know whether it makes financial sense to repair or replace old equipment given the equipment's value in the appraisal. If your shop isn't valued as highly as you would like, you can make changes to the business to boost its value so you can earn more at the time of sale. 

A machine shop isn't something that you set up and leave alone. It's always changing. So while there are many reasons to consider appraising your machine shop, know that an old appraisal isn't necessarily reflective of your shop's current business valuation. If it's been a while since you've had your machine shop appraised, or if you've never appraised it, search for an appraiser with demonstrated experience with machine shop appraisals today. 

When you work with lumber, it's not uncommon to deal with fluctuating values. The lumber you use changes cost after a major hurricane makes prices skyrocket. Your finishing materials change when a manufacturer goes out of business. Your tool costs can even change value when they're put on sale. But what about your woodworking equipment after you've paid the bill? As one of your shop's most expensive assets, appraising woodworking equipment should be at the top of your list when it comes to recording asset values. Here's a quick look at some common reasons why woodworking equipment is appraised.

Why is it important to consider appraising woodworking equipment?

When you know how much your equipment is worth, you're in a better position in a number of different circumstances. Here are a few to consider:

• A fellow woodworker visits your shop and notices your rarely-used shaper that has been sitting in the corner for the past five years. They ask how much you want for it. If you don't know, you could be asking far too much and costing yourself the opportunity or losing significant value by asking far too little. How do you determine a fair value for your equipment in this situation?
• A rag is left with finishing products on it and spontaneously combusts, starting a workshop fire that causes significant damage to your high-end cabinet saw. When the insurance adjustor comes out to inspect the equipment, he quotes you a much lower reimbursement amount than you feel your saw was worth. How do you prove the saw's value to get appropriate reimbursement for your broken equipment?
• After declaring that you're spending too much time in the shop, your spouse states that they want a divorce. Whether you live in a community property state or not, your woodworking equipment is brought into the debate. Your spouse has found the latest models of your equipment with the highest possible values, even though your machinery has been in use for over 20 years. How can you prove what your equipment is really worth and avoid being taken to the cleaners in the settlement?
• Following years of operating your woodworking business, you're ready to expand. But because of a couple questionable financial issues on your credit report, your bank is balking at approving your new business loan without any collateral. You're willing to put your existing machinery up against the loan, but the bank isn't certain of the value. How can you document it's worth?
• With a need to increase tax funds through the county, your local tax assessor makes a mistake and determines that your bandsaw is worth significantly more than you paid for it in the first place. They don't want to back down and aren't even willing to make a concession that they could be wrong. How do you fight the bad assessment?

By appraising woodworking equipment in your shop, you'll gain a much better idea of what those assets are worth. This allows you to make better decisions about whether you should invest in repairs, replace a piece of machinery or upgrade to a different model. However, not all equipment appraisals are the same. Make sure you take the time to work with a certified equipment appraiser. This ensures that you're getting machinery values from an independent third party that will hold up well to strong scrutiny.

When you're in agriculture, your finances can go up and down with the market. Knowing the overall value of your farm assets helps you make wise decisions for your operation's future outlook. With the high cost of machinery today, appraising farm equipment can help you get a better grip on your farm's finances and the overall value of your assets. This can come in handy when you need to make an insurance claim, fight inaccurate tax assessments or secure financing for a farm loan. Here's a quick look at the many ways farm equipment appraisal can help you improve the accuracy of your farm finances.

Going to seed: How appraising farm equipment improves your farm finances

Whether your equipment is the latest model or an aging fleet of implements and tractors, that equipment represents a large portion of your farm's assets. Combine that with the value of your land itself and you're looking at almost every asset for your farm operation. It's easy to see how the value of your farming equipment can strongly impact your farm's economic status. 

With the changes in the tax laws, you can choose to deduct the full cost of new equipment for at least the next few years, which reflects a strong change from the depreciation tables of the past. But whether you use standardized depreciation tables or deduct the cost using the new tax laws, your machinery's value probably does not change to meet those estimated values. Why?

When you use a depreciation table, you're assuming that your machinery is losing value at a steady rate that happens to match the time period of the table. However, many farmers have old equipment lying around that is used regularly which reached a value of zero on the depreciation table ages ago. That doesn't mean that that old hay wagon, ancient farm truck or aging tractor has no value in your operation.

What would you do if you had a fire in your machine shed and lost that equipment? The depreciation tables and your books may reflect that the equipment has no real value, but you know you'll need to replace it before harvest comes around. When you need to make a claim with your insurance company, will their standard value actually cover the cost of replacing that equipment? In situations like these, it's important to have your equipment appraised.

When you need to fight a bad assessment or estimate of value from an insurance company, court or financial institution, an equipment valuation from a certified appraiser provides a solid basis for value. Because a certified appraiser uses standardized methodologies to calculate value, these values have been proven to stand up well to strong scrutiny.

Appraising farm equipment helps you record your machinery's value both at current as well as over time. This, in turn, allows you to update your financial books, which tells you exactly where your finances fall when you need to determine whether expanding your operation, replacing older machinery or upgrading machinery to improve productivity. However, before you try to get a machinery value from your local equipment dealer, remember that they have a vested interest in selling you new machinery, which will impact their valuation. Make sure you work with a certified equipment appraiser to get an accurate machinery value.

Welding robots, presses, brakes: when you work with metals, machinery can be one of the largest assets your business benefits from. But how do you protect that investment? Though it's often left until a piece of machinery is being sold, appraising metalworking equipment can help you better judge your equipment's longevity and useful remaining life. This allows you to make better decisions on when it's time to upgrade or replace your equipment. But what happens during the appraisal process? Here's a quick look at some factors that are taken into account when an equipment appraiser looks at your metalworking machinery.

What is looked at when appraising metalworking equipment?

When you contact an equipment appraiser, you'll be asked a number of different questions, but one of the first quickly decides exactly what direction the appraiser will take in calculating equipment values. Because the methodologies used by equipment appraisers have been tested in a range of different circumstances for decades, it's important that the appraiser understand the reason why your machinery needs to be appraised. You'll receive a different value based on whether the equipment is being sold quickly to settle an estate, replaced for insurance purposes, part of divorce proceedings or for a change of ownership.

However, the areas that an appraiser will look at are often very similar. The appraiser will start by looking at the machine's age, overall condition, resale value, the condition of the market you supply, how well the equipment has been maintained and any features that may raise its value. If a piece of machinery has been abused or neglected, it will have a much lower value than equipment that has been well maintained and kept in good repair over the course of its entire lifespan. This information helps the equipment appraiser in a number of different ways.

The machine's age will often play a part in the machinery value, as it can help the appraiser determine roughly where the machinery falls across its lifespan. Does that model tend to last for ten years, twenty years or thirty years? This can make a big difference in value if the equipment is nine years old, as it helps determine how long that machine will roughly provide value to the business. What is its usual resale value and are you willing to wait for the right buyer or sell quickly? Is the equipment currently in demand? This can be determined by the economy and whether you'll be able to find buyers for your equipment without taking a heavy loss. Additional features can help boost value.

Appraising metalworking equipment can benefit your company in a wide range of areas, but by knowing what the equipment appraiser will be looking at can help you get a better eye for machinery values yourself. By having your equipment regularly appraised by an independent third party, you can draw up a schedule and plan for when equipment will need to be replaced, allowing you to shop for the best deals and, if needed, secure the best possible financing for your specific situation. Make sure you're working with a certified equipment appraiser who has experience in your industry to ensure you're getting the most accurate information on your company's values, as that appraisal report will hold up to strong scrutiny in legal, financial, tax and insurance circles.

When you run a healthcare practice, your machinery is a big part of your business assets. As a large investment, knowing what it's worth is important to knowing where your practice's finances stand. However, it's also one of the most overlooked parts of your business' overall worth, often only looked at when it's time to sell the equipment or the practice. When you take the time to really keep track of equipment values, you can make smarter decisions that can improve the overall value of your entire practice. Here's why appraising medical equipment helps you keep a pulse on your business' bottom line.

Stat: Why appraising medical equipment is vital to the health of your practice

Why is it important to have your business bank accounts balanced on a regular basis? Why do you take a look at your profit and loss statements? Why do you make sure bad debts are pursued? Much like these other areas of financial concern for your practice, medical equipment appraisal helps you determine your practice's worth in the marketplace.

Like many other types of professional equipment, medical equipment depreciates in value over time. This can happen due to wear and tear, the appearance of new features in updated models, industry shifts to newer technologies and other issues. As it depreciates, your practice loses asset values. With the changes in the tax code, this process is becoming more important than ever, as you can now depreciate the full value of your machinery in a much shorter time period. Where does that fall with your updated tax strategy?

When your medical equipment is appraised, the appraiser looks at a number of factors. What condition is the machinery in? Has it been well maintained and received repairs as needed? Does it currently need repairs or have non-functional features that will impact its value? What about the market? Is this a common manufacturer or model that has a reputation for exceptional performance that will hold its resale value down the road? Is it an odd brand that will be hard to find a buyer for? Has it been largely replaced by more modern equipment that has features that have become standard? Are there features that provide additional benefits to a prospective buyer that are not typical for that type of machinery?

These factors impact the overall value of the machinery and help you determine how much insurance you need, what it's worth in legal proceedings or what you should expect in property tax assessments. By knowing the value, you know whether the value represented by the outside concern is accurate or not.

When you take the time for appraising medical equipment as a regular part of your practice's overall financial management, you can quickly determine which equipment should be sold before it loses value and what machinery may provide significantly more value to your practice before it needs to be replaced. When you decide to have your medical machinery valued, make sure that you verify that the appraiser you're working with is an experienced certified equipment appraiser. This helps ensure that they have the expertise and experience needed to provide you with an accurate value that will hold up in a wide range of areas, including insurance, taxes, legal and financial circles.