When a business is sold, the price you negotiate is based on a wide range of factors, including real estate, anticipated income, goodwill and assets. But how do you determine the equipment values of what you're selling or purchasing? The best method is by allocation of assets, which puts a price tag on everything that is changing ownership, allowing you to document the data and for each items to be depreciated and accounted for it in the business' records. But how is the total price determined and allocated across the business? This is where asset allocation using equipment appraisals can help.
Whether you're determining the value of your assets or need to break down the price you're paying for a business across its assets, an equipment appraisal can make all the difference. It will look at each individual piece of equipment or groups and document the equipment value for a wide range of purposes. Beyond allocating for tax purposes here are a few additional thoughts:
By getting a quality machinery valuation performed by a certified equipment appraiser, you can document the allocation of assets across a business, ensuring assets can be properly tracked. But don't just go to a local dealership and hope they give you the right numbers, because that can prevent you from fully realizing what your equipment is worth. They may be providing biased numbers to get a trade-in. A certified equipment appraiser has gone through training in the appropriate methodologies to provide you with an equipment appraisal that will hold up to scrutiny.