Equipment Appraisal Blog | Understanding Machinery Appraisals

When you need to have an appraisal performed on your equipment, it's important that it be performed by a valuation specialist who has the proper credentials. One of the largest accreditation organizations for appraisal practices is the American Society of Appraisers. But what is it, why is it important to use a certified appraiser and what difference can it have on your equipment appraisal? Here's a quick rundown to help get you started.

What is the American Society of Appraisers and how will it impact your appraisal?

The ASA grew out of two organizations formed in the 1930s, the American Society of Technical Appraisers and the Technical Valuation Society. Incorporated in 1952, the ASA was formed to create an over-arching professional association of appraisers, regardless of their specialty. Through the decades, the ASA has worked hard to develop professional standards and practices for appraisal practice to bring regularity to the industry. It has focused on refining appraisal practice to the point that the methodologies that they have developed will hold up well to strong scrutiny in many situations, including legal, financial, insurance and tax agency circles. The organization has also developed sub-levels of its certification process to cover a wide range of appraisal practice, such as business valuation, gemstone and jewelry appraisal, real property, personal property and machinery & technical specifications.

The thorough certification process that the ASA has developed teaches new appraisers how to use those tested methodologies and in which situations they should be applied to find the most appropriate value for your equipment. The process of becoming an ASA-certified appraiser involves an in-depth combination of acceptable classes or education and professional appraisal experience. This specific combination ensures that anyone who has received an ASA certified designation has both the knowledge as well as the real-world experience to reasonably put their training into practice.

By having your appraisal performed by an ASA-certified appraiser, you can ensure that your valuation report will hold up to strong scrutiny in a wide range of circumstances. Did you know that in a few particular circumstances, the law requires a specific type of valuation to be performed? Did you know that you can have machinery valued even after it has been damaged in a fire or donated to a charity? What about determining the value of a piece of machinery some amount of time in the past for a court case or similar back-dated valuation? Because of the experience and knowledge gained in the certification process, a certified appraiser knows exactly what type of appraisal needs to be performed, can easily deal with situations such as these and is still able to develop a high-quality appraisal report that will help support your machinery's value to a number of different parties.

Having an appraisal completed on your equipment by an appraiser who is certified by the American Society of Appraisers is an excellent way to get a quality valuation. A machinery appraisal provides you with documentation of your equipment values, but if it isn't performed properly, it won't hold up to strong scrutiny. At that point, you've thrown your money away on an appraisal that doesn't do you any good. To get the best value for your dollar, make sure that your appraiser is certified by the American Society of Appraisers or a similar appraisal certification organization.

When you're getting a business appraisal, have you checked whether the equipment appraiser is an ASA accredited appraiser? Though it may not seem important right now, ASA accreditation can make a big difference in how well your machinery valuation holds up to scrutiny, whether it's with a bank, an insurance company or a court of law. Here are a few reasons why you should always get an ASA accredited equipment appraisals.

7 Reasons you should work with an ASA accredited appraiser

1. Standardized methodology: When an appraiser goes through the certification and accreditation process, they learn a series of standardized methodologies and the situations in which they are best applied. These methodologies have been developed over time and have been tested in legal, financial and insurance circles, proving their effectiveness in the field.
2. Holds up to scrutiny: Because standardized methodologies are being used in the appraisal, it holds up better to scrutiny in the courts, with your bank or when making a claim with your insurance company. We've all heard stories where companies lose thousands of dollars because their equipment appraisal didn't meet particular standards; with an ASA accredited appraisal, you're covered.
3. Knowledgeable about appraisal methods: Why do you need the appraisal? Appraisal practices are very different depending on why you need them. A forced liquidation will give you a much lower equipment valuation than a fair market value where you have plenty of time to move equipment without any outside influence.
4. Knowledgeable about your industry: What's the market like for your business right now? If the market is in a slump, there may be a lot of that machinery hitting the market, driving the price down. An equipment appraiser who is aware of market conditions can better factor for these issues and account for them in the appraisal.
5. Exceptional accuracy: How accurate is that machinery value you've received? Someone at your local machinery dealership may be able to give you a ballpark figure, but they're motivated by getting a sale. A certified appraiser is independent of these motivations, providing you with the most accurate possible picture of your machinery's value.
6. Experienced in appraisal: Because equipment appraisers spend all day determining equipment values, they can provide a more accurate picture of what those values are. They're not figuring out the value of just one individual piece of equipment every once in a while. They spend their entire day looking at equipment, often within a single industry. This allows them to quickly ascertain the exact value of your equipment.
7. Knowledgeable about equipment condition: Because accredited appraisers spend so much time looking at equipment, they have a very good idea of when a piece of equipment is in good condition and when it is in poor repair. This means that your equipment isn't being valued the same as broken-down machinery that isn't worth a thing.

By working with an ASA accredited appraiser, you can quickly discover the actual value of your equipment in a variety of situations. Staying on top of your equipment values will help ensure you have a more accurate picture of what your machinery assets are actually worth.