When you work with metals, you've got plenty to keep on top of. Metals futures, commodity trading and market changes that impact your business' profitability can quickly take up a lot of your daily focus. But that doesn't mean that you should forget about the value of your equipment! Many business owners don't understand how a metal fabricating asset valuation works, which causes them to wait until specific circumstances to have one performed. However, by understanding how the process works, you can get a better grip on how to use this valuable tool to help manage your business' metal fabrication equipment assets.

How Does Metal Fabricating Asset Valuation Work?

There are a number of areas that are considered during a metal fabrication asset appraisal:

• What condition is the equipment in? Generally speaking, the equipment's condition in terms of hours, whether it's being used heavily or lightly, if it appears to be in good condition and similar details will help the appraiser determine how high demand will be for a piece of equipment.
• Is the equipment in demand in the market? As an example, welding robots that can be set up for machine learning are a hot commodity with the popularity of IoT and AI, which can dramatically increase the estimated value of the equipment. Machinery that does not have this capability may see lower values.
• Does the equipment have any special features, options or kits that have been added that impact its value? When your equipment does more, it often increases the estimated value, provided that it is able to truly deliver value. A feature that was tossed on at the last minute may not perform well, actually lowering value.
• How well has the equipment been maintained? If you can provide logs of maintenance and repairs, this documentation serves as proof that the equipment has been well cared for over the years and will continue to function long after poorly-maintained equipment will begin to fail. The appraiser also looks for signs of abuse, such as dents, unrepaired issues and similar problems that shorten lifespan.
• Are there changes in the market that are increasing or decreasing demand for that type of equipment? As with the AI-capable welding robots mentioned above, changes in the market can rapidly change the demand for your equipment. Stay on top of changes that are coming down the road by buying new machinery at the right time.
• What is the equipment's expected remaining useful lifespan? Knowing how long the equipment will last provides a data point for the appraiser to estimate its value. Equipment that is on the verge of failing has a lower estimated value than equipment that is expected to last a long time.

Metal fabricating asset valuation can be a powerful tool, making it easier to negotiate a fair market price when it's time to buy or sell used equipment, deal with insurance adjusters who don't have a solid grasp of your equipment's value, fight an incorrect property tax assessment or leverage the estimated value of that equipment to help secure financing to grow your business and take it to the next level. However, you can only realize these benefits if your equipment appraisal has been performed by an accredited equipment appraiser, who has been educated in the right way to estimate your equipment's value. An accredited appraiser will never have any problem providing you with verification of their training and background.

Your life is on the land, working the soil, managing your livestock and keeping the family farm going. You know that getting a new tractor or upgrading your farm's operation to include a drone can be expensive, but do you know what your equipment is really worth? A farm equipment appraisal can cover a lot more than just figuring out the value of your tractor. Here's a quick look at the types of machinery covered during an appraisal.

What Kind of Machinery is Covered in a Farm Equipment Appraisal?

• Tractors. Of course, as one of the primary ways to get work done on a farm, a tractor is one of the most commonly-appraised assets. The amount of horsepower, drivetrain, PTO capability and similar features go a long way to helping you get through your to-do list, and they all have value.
• Implements. Backhoes, bale spikes, front-end loaders, mowers, balers, drills, plows, harrows, rakes: whatever kind of implements you're using on your equipment, it helps you get the job done and can represent a large portion of your investment. Knowing what that investment is worth helps when you're contemplating an upgrade or trade-in.
• Drones. Combined with a solid precision agriculture strategy, aerial drones do a great job of spot-treating problem areas in your fields. This allows you to get a birds-eye-view of your herds, apply fertilizer, release beneficial insects and handle any number of other tasks without flattening your plants or even leaving the house.
• Refrigerators and coolers. Whether it's getting milk from your dairy herd cold, cooling your produce or just keeping some of those wonderful, farm-fresh products cold and fresh for your customers at the farmer's market, these vital pieces of equipment help extend the life of your harvest.
• Trailers and tow vehicles. With the cost of heavy-duty trucks, stock trailers and grain wagons, it's important to have an idea of what this type of equipment is worth. By knowing the estimated value of your farm truck, you can better decide when it makes the most sense to start looking at replacements, before you've lost too much of your trade-in value.
• Livestock handling equipment. Squeeze chutes, separating gates, corrals, round pens: when you have a livestock operation, you've got a lot of equipment in the field at any given moment, especially when it's time to change things up for the season or send your stock off to the market. Valuing this equipment makes it easier to know what you've got on the ground.
• Greenhouse equipment. Season extenders such as greenhouses, hoop houses and similar setups include their own range of equipment, including fans, automated vent systems, mist systems, roller tables, propagation systems, irrigation, shade cloth mechanization and numerous other items. By knowing what they're worth, you have a better idea of your overall investment.

Having a farm equipment appraisal performed on your operation's machinery can make it easier to deal with incorrect tax assessments, file insurance claims, prove value during a sale or financing situation and when facing legal issues. However, that estimated value will best hold up to scrutiny if you have the valuation performed by an accredited equipment appraiser, who has had extensive education and experience in determining value throughout their accreditation process.

When you have new equipment that you're trying to finance or will lease out to other companies as part of your business, how much is it actually worth? A residual value analysis-M & E provides you with a range of important information about your new equipment, making it easier to prove value for a wide range of circumstances. When you have an accredited equipment appraiser estimate your equipment's value, you've got solid documentation for financial transactions and courtroom battles. Here's a quick look at how residual value is estimated.

How is residual value for equipment leasing estimated?

To start, let's take a look at what residual value actually means. Residual value simply means the estimated future value of the asset from a Fair Market or Liquidation perspective. Based on the appraiser's experience and their understanding of how residual value is established in the equipment leasing industry, the value can be estimated based on a wide range of outside factors. These include:

• Current Listings: How much is the equipment being listed for resale for across the local, regional and national markets? How expensive would it be to ship to the other side of the country where the market is booming?
• Data Based on Prior Sales: How much has the equipment been selling for over the past few days, weeks or months? Equipment listed at auction often doesn't reflect a final price until the auction has finished and the sale has taken place.
• Understanding Typical Market Depreciation Levels: How much should you expect the value of the equipment to decline over time? A well-trained appraiser understands the rate of depreciation for a wide range of equipment, providing them with the tools they need to estimate an accurate value.
• Size of the Resale Market: How much demand is there for the equipment that's being valued? If there's a lot of demand, you may be able to receive a higher offer for the sale of the equipment or higher reimbursement for its loss because it will be more costly to replace than usual.
• Current Economic Conditions: When the economy is strong, people are more likely to pay an initial asking price rather than negotiate, while poor economic conditions may limit your available buyers, lowering the amount you can sell the machinery for.
• Status of the Industry: Is your industry growing? If so, the demand and expected price of the equipment may also rise. If your industry is doing poorly, the demand and expected price may fall.

All these factors have a place in determining an estimated residual value for the equipment. The appraiser will also take into account the specific machinery, emerging technological trends that may increase or decrease the market and similar aspects when determining the equipment's estimated residual value. 

By having a residual value analysis-M & E performed on your business' machinery assets, you can ensure that you're able to leverage those assets to your benefit for a wide range of situations. However, the estimate of value you receive on your equipment is only as good as the appraiser who is completing the process. Make sure that you work with an accredited equipment appraiser to ensure that your estimated value is accurate and properly determined, allowing it to stand up in a wide range of real-world circumstances.

Whether you've made a switch to reduce your monthly energy bills, need to have off-grid power in case of an emergency or are invested in getting more alternative energy into the world, do you know what the value of that equipment is worth? An alternative energy asset valuation helps you stay on top of your equipment values, but what kind of equipment is covered during the process? Here's a quick overview to help you get started.

What Equipment is Covered in an Alternative Energy Asset Valuation?

• Solar PV Panels: Photovoltaic (PV) panels are an interesting accounting conundrum, because of their extremely long lifespan. Rated to last 50 years or more, PV panels are often completely written off the books in terms of value within a matter of years, because of how tax agency depreciation works. However, that doesn't mean that the PV panels no longer have any value! Having these panels appraised provides you with a solid idea of what they're worth, even a decade or three after they've been installed.
• Wind Turbines: Unlike PV panels, wind turbines have mechanical systems that can wear out over time. Depending on the amount of use they receive, how much of a beating they take from storms and the overall quality of materials and design, they may still last for a very long time and should be appraised to determine both their expected remaining useful lifespan and their value. This will help you decide at what point these machines should be replaced.
• Hydroelectric Turbines: Unlike wind, hydroelectric turbines typically operate under a steady amount of production, with no sudden increases or decreases in terms of flow, productivity and load. This makes this type of equipment last a very long time, with some Scottish hydroelectric turbines being over a century old! For that reason, much like PV panels, it's important to have their value determined, as they'll continue to have value long after they've been fully depreciated.
• Generators: Though the other assets we've discussed have been renewable energy, generators are not. When you need to have constant electrical service, such as at a medical facility, secure location or similar situation, a backup generator is commonly used to provide the additional power. They may also be installed to provide a backup for renewable energy systems during times of poor energy production. Generators will age and wear, so having an equipment appraisal performed ensures you know their condition and current value.
• Transformers, Chargers and Similar Equipment: Unlike standard line power, alternative energy systems have a wide range of additional equipment to operate successfully. This can include voltage transformers to step power up or down, inverters that change the system's direct-current power to alternating-current 120V or 240V standard single-phase power, chargers for battery banks and a range of other necessary equipment.

Having an alternative energy asset valuation performed on your equipment makes it much easier to deal with insurance claims, incorrect tax assessments and a range of other potential situations you may face. However, it's important to make sure that you're getting a valuation from an independent accredited equipment valuation specialist who has no interest in the outcome of the appraisal, as that will ensure that you're receiving an accurate estimate of value for your alternative energy assets.

Whether your business specializes in medical testing or simply has diagnostic equipment as a part of your overall operation, the value of those assets can make up a large portion of your balance sheet. At the same time, it's not uncommon to quickly depreciate the value of that machinery using tax tables, which reduces the value of that equipment on paper. What is the equipment actually worth? A medical lab diagnostic testing equipment appraisal can give you important insights into the value of your diagnostic equipment.

What's Involved in Valuing Medical Lab Diagnostic Testing Equipment?

But how does the valuation process work when it comes to diagnostic equipment? To start, your equipment appraiser will need to know some basic information. They'll need to know the manufacturer and model number of each piece of equipment you'd like to have appraised. They'll need to know if you've had any options or kits added to it, or other work that would modify the equipment, such as adding a heavier-duty table to your MRI to handle obese patients. They'll want to know how often the machinery has been used and how much wear and tear it's received over the years due to poor usage practices. The appraiser will need to see any maintenance and repair records for the equipment to ensure that it's being cared for properly and that any problems are being addressed quickly, before any other damage can occur.

Once this has been done, they'll take the information that they've collected and compare it against a number of different information sources. They'll take a look at what that specific piece of equipment has been sold for recently on the open market. The appraiser will make adjustments to account for your equipment's condition and the remaining expected useful lifespan. They may even take a look at your industry as a whole and determine whether that specific equipment is still in demand or if it's giving way to better technology.

After this information is gathered, the equipment appraiser will calculate the equipment's value using a number of methodologies that have been tested in a range of professional circles, including insurance, tax, financial and legal circumstances. This value looks at the equipment's original value, any amendments that have been made to it that may increase or decrease value, its expected remaining useful lifespan, demand for that piece of equipment on the open market, any damage or unrepaired issues that are still outstanding that will negatively impact the equipment's value and similar issues. This information, along with the final value calculation, is assembled into a professional report.

By having an appraisal performed on your medical lab diagnostic testing equipment, you can ensure that you're taking full advantage of your business' assets when the opportunity for growth presents itself. But don't take the word of your local equipment sales rep or another party who has a vested interest in that value. Instead, consider having an independent third-party appraiser value your machinery. By working with an accredited equipment valuation specialist, you can ensure that the valuation report you receive will reflect an accurate estimate of the equipment's value, not an over- or under-estimation designed to help the appraiser sell more of their equipment.