Equipment Appraisal Blog | Understanding Machinery Appraisals

How a Property Tax Appeals Appraisal Helps You Win!

Posted by Equipment Appraisal Services on Mon, Jun 24, 2019 @ 08:00 AM

property tax appeal appraisal

When you're dealing with a local tax agency over the value of your property, it can be a frustrating experience. Fortunately, there's one tool you can bring to bear that will prove the worth of your equipment assets beyond any other: equipment valuation. By having a property tax appeals appraisal performed on your machinery, you'll have an independent source verifying the value of your equipment. Here's a look at how the process works and how it backs up the value of your equipment.


How a Property Tax Appeals Appraisal Helps You Win!

Equipment values can be estimated in several different ways, and tax assessors may or may not be using an appropriate method to determine your tax liability on that equipment. In many cases, tax assessors are dealing with a very wide range of property when they're trying to determine value. Homes, boats, cars, business structures, machinery, livestock: these are all property that a tax assessor must attempt to determine value on. They don't specialize in any one area, so it can be very difficult to accurately determine value with the sheer variety of assets they must assess.

An equipment appraiser, on the other hand, tends to specialize in specific types of equipment, and only equipment. This puts them in a much better position to determine the value of your machinery. They have a much better grasp of the nuances between types of injection molding machinery or metal presses, as an example. This means that they know that the machine that you're using in your business is worth more or less than the one being used at a similar facility a half mile away. 

They're also well practiced in calculating value. When a certified appraiser goes through the certification process, they're being taught a range of different methods to calculate value. This education ensures that they know which methodology to use in which situation, so your equipment is being properly valued when they work through the process. The final calculation provides a solid basis for value.

But why are these methodologies so much better than the ones your tax assessor uses? Because valuation is the appraiser's business, they use methodologies that have already been tested in a wide range of real-world situations. In financial circles, insurance claims, court cases and tax appeals, these methodologies have been put to the test time and time again and have come out ahead. Because they've been through this process, equipment appraisals that are performed using these methodologies are viewed in a favorable light in these circles. This ensures that your appraisal will help you prove value and win your appeal quickly.

By having a property tax appeals appraisal performed on your equipment, you can quickly prove the exact value of your equipment without having to spend a lot of time arguing with the tax board. However, these benefits only apply if you're working with a certified equipment appraiser, because the methodologies, experience and education mentioned above are taught during their certification process. If you're not sure whether the appraiser you're considering working with is certified or not, take a few minutes to ask about what their professional certifications and qualifications are to ensure you're hiring the right person for the job.

Tags: Property Tax Appeal Valuation

5 Ways That Valuing Spare Parts Inventory Benefits Your Bottom Line

Posted by Equipment Appraisal Services on Mon, Jun 10, 2019 @ 08:00 AM

Spare Parts Appraisal

What are your company's spare parts really worth? If valuing spare parts inventory isn't the first thing that crosses your mind when it comes to keeping your business in operation, you're probably not alone. However, despite being a less than glamorous part of your business, your spare parts can actually tie up a large portion of your business assets. Knowing the value of that asset helps you make smart decisions on asset recovery and what to do with outdated parts that may do better sold and replaced for your business. Here's a look at several ways that having your spare parts inventory valued can improve your company's position.


5 Ways That Valuing Spare Parts Inventory Benefits Your Bottom Line

  1. Is it capitalizable or is it prepaid parts? This is one question that is best answered based on the part's value. If it's gone up in value, it could be capitalizable. If it's lost or maintained value, it can be expensed as a prepaid part instead. Whichever approach you take to keep your books up to date, having an accurate value for the part is vital to determining where its overall place should be in your accounting system.
  2. Are your books accurate? Accounting inaccuracies are one of the top reasons people have valuations performed on all kinds of assets, because parts that are expensed or capitalized may not reflect an accurate value in your books. If they've been depreciated, gained value due to difficulties in production or similar issues, your books may not reflect accurate numbers.
  3. Can you leverage the value of your spare parts? If you have an extensive spare parts inventory, such as that which might be kept by an appliance repair company, those spare parts have value, which you can leverage to grow your business. Imagine securing a loan for a new repair truck this way, as the assets only go away when you're generating more income to pay the loan.
  4. Is it worth keeping the spare parts around anymore? If the equipment that the spare parts have been stored for has been sold or has become obsolete, there may be no reason to keep the spare parts around. In this situation, selling those parts and either purchasing parts for the equipment you currently use or leveraging that profit for other uses may be a smart way to manage your company's assets.
  5. What condition is it in? If your spare parts inventory is rarely checked and has parts that can degrade, such as rubber dry rotting or plastic becoming brittle, it may not be worth what you think it should be worth. This means you'll need to replace it at expense rather than having it ready to go when it's needed most, delaying production and wasting resources.

By taking the time for valuing spare parts inventory, you can effectively leverage the value of these parts in your overall business plan while realizing accurate figures in your books at the same time. However, the valuation process can be difficult, subject to many shifting market forces that you may not have considered. Using a certified equipment appraiser to determine the value of your spare parts inventory sets you up for success, with a verifiable report of value that holds up well to strong scrutiny in a wide range of situations.

Tags: Spare Parts Appraisal