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 Knowing the value of that asset helps you make smart decisions on asset recovery and what to do with outdated parts that may do better sold and replaced for your business.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.

Whether you're a smaller business that has some computer assets of questionable value or a large corporation focused strongly on digitization and technology, having an IT equipment appraisal performed can make a huge difference in your company's bottom line, often in ways you wouldn't have considered. With the fast pace of improvement and innovation in hardware and IT assets, you may consider that equipment to already be obsolete, but the answer may surprise you. Here's a quick look at how having your IT equipment appraised by a certified equipment appraiser can make a big difference to your company's financial situation.

Using IT Equipment Appraisal to Benefit Your Company's Bottom Line

• Old equipment worthless? It may not be. Companies that test their software on legacy systems are often willing to pay top dollar for older machinery, giving you options for resale that you may not have considered. Plus, if it's able to keep up with future needs, it may not be time to replace it just because it's gained a few years of operational time, provided that it's in good condition.
• Speaking of that, let's talk about the condition. There's a good chance that if you took good care of your equipment by keeping it in a dry, cool, clean environment, it may still provide many years of reliable service. Equipment that is poorly kept, such as being kept in damp, hot or dusty conditions, will not last nearly as long.
• Because certified appraisers work with IT equipment on a daily basis, they know what to look for in terms of wear and tear and overall condition. This allows them to make an educated judgment about the estimated remaining useful lifespan of your IT assets, allowing you to make a smart decision about whether you should retain or replace your aging machinery.
• Are you're considering buying another company's discards to up your IT game? Before you do, you may want to have the equipment you're considering appraised for all of the reasons mentioned above. This will help you avoid purchasing equipment that may not provide you with the benefits you're expecting for any period of time, helping you to make smart decisions in your investment process.
• Thinking about selling your old IT equipment? Having an appraisal performed on that equipment allows you to not only know what to ask for it, it provides you with solid documentation of what the equipment is actually worth. This puts you in a solid position of power when negotiating, especially when dealing with prospective buyers who want to strike a hard deal at your expense.

As you can see by the above information, having an IT equipment appraisal performed on your company's computer assets can make a huge difference in your profitability, growth and ability to expand operations without a lot of risk. However, this only happens when you use a certified equipment appraiser. If you try to use your equipment vendor, they'll quite often tell you what they think you'll want to hear in a way that would benefit their company, by increasing their sales. A certified equipment appraiser is an independent third party who will provide you with an unbiased calculation of your equipment's overall value, allowing you to make a smart decision for your company's benefit.

When you work with petroleum, your equipment works just as hard as you do to get the job done. But have you ever considered what that equipment is actually worth? The process of appraising oil & gas industry equipment can be a complex process, but it follows standardized methodologies to calculate a value that is accurate to your specific equipment. Here's a look at how the process of appraising petroleum equipment works.

What Happens When Oil & Gas Industry Equipment is Appraised?

When you're having your oil & gas equipment appraised, there are a wide range of options that are considered while the value is being calculated. To start, you'll want to work with a certified equipment appraiser who has experience appraising machinery that is used in the oil & gas industry. This means that they're already familiar with that machinery, making it much easier to get the results of your appraisal more quickly. 

The first step in the process happens when you contact the appraisal company and are connected with an appraiser who has experience in your industry. Once the appraiser returns the contact, they gather information from you about the equipment that you need to have appraised. Having that information available at the time of contact will make this part of the process go much more quickly. That information should also include the year of manufacture, the manufacturers, the models and any accessories, kits or options that were added to the equipment.

After the appraiser has gathered this basic information, they can begin to look into further details about each piece of equipment. They can determine the usual useful lifespan for that equipment, what it tends to sell for on the open market, any particular issues that it commonly has issues with and what the current demand is for that machinery. 

Once this step is complete, the appraiser will take a solid look at the equipment itself. They'll look for signs of abuse, records of maintenance and repairs, potential issues or points of failure that are showing up, wear and tear on the equipment itself. They'll consider how long the equipment has been in use compared to the usual length of time that it tends to usually last in the field. This information all ties into the final value that is calculated on your equipment.

Following the gathering of this information, the appraiser uses a set of standardized methodologies to determine the value of your equipment. These methodologies have been tested over decades of exposure in courts of law, financial circles, insurance claims, tax agencies and machinery sales. This means that the information will provide you with solid information to base your company's future decisions on, decisions that can make or break your company if they're not made properly. 

Your company's oil & gas industry equipment is a big part of your company's assets, so taking care of those assets by maintaining a solid calculation of those assets' value helps you keep accurate books. This, in turn, gives you the information you need to make smart decisions when the market is unstable or new opportunities present themselves. Without this information available, you may end up making decisions based on inaccurate books, which can put your company at serious risk. However, it's important to work with a certified equipment appraiser who has experience in your industry.

Whether you've had a recent loss or are simply planning your retirement and estate, dealing with your machinery can be a serious issue. Fortunately, estate settlement equipment appraisal can provide you with a lot of the answers you need to get everything settled properly, allowing your family to more easily get through the process with fewer arguments and hurt feelings. Here's a look at how the process works, including a few different situations where different approaches may be used to calculate value.

How Does Estate Settlement Equipment Appraisal Happen?

Let's start by taking a look at a couple different situations. In the first, the family of the deceased is happy to wait for the right buyer to maximize their benefits. They want to get the best possible value for the equipment and have conveyed this to the appraiser, who uses fair market value to determine the value of the equipment assets of the estate. The machinery is listed on the market, but may not sell quickly. This can be an issue if the space it is located in needs to be sold or a lease ended.

In the second situation, the family simply wants to have the process finished as quickly as possible so that they can plan for the future. At this point, the appraiser uses a different approach to calculate the value of the machinery, because they assume that the equipment must be sold at a discount to make it sell faster. Referred to as liquidation value, this can either be used as a forced liquidation, which provides the minimum value, or ordered liquidation, which allows at least a short amount of time to find a better buyer.

But what if the family members don't agree on what should be done with the machinery? Perhaps one family member will be continuing the business. In this case, the fair market value that is calculated can be used as a basis to secure a bank loan to pay off the remaining family members, allowing them to quickly receive their funds while the family member who is continuing the business has an easier approval process, because the value of the machinery has already been verified through a standardized methodology.

In yet another situation, some of the family members want to wait for the best possible return while others want to have the process completed quickly. In this situation, having individual machines appraised means that the estate can be split, with those who want the best possible return holding onto their equipment and those who want to quickly turn the estate around selling at liquidation rates. If you think you may face this situation, it may make sense to split the estate in advance of need and have the groups appraised accordingly to expedite the process.

By incorporating estate settlement equipment appraisal into your overall estate planning or settlement process, you can rest at ease knowing that the value of your machinery is being calculated by a professional appraiser who understands your industry and the issues that are involved with estate settlement. However, it's vital that you work with a certified equipment appraiser, as this ensures that the methodologies used will bear up in legal and financial circles, such as probate court or a family member who needs to get a loan to finance buying out other parties in the business.

If you have a factory, you already know how much of your company's assets are tied up in your production line. But what are those assets really worth? The process of having a production line equipment appraisal can seem complex and confusing, but it's actually a straightforward set of calculations that follow a regular process. However, it's a process best done by a certified equipment appraiser. Why? There are a number of special aspects of the process that needs to be handled by a professional to ensure that they're done correctly. Here's a quick look at the overall process and some of the complexities involved.

How Complex Is Production Line Equipment Appraisal for Manufacturing?

• To start, the appraiser will gather basic information about all the different equipment that is being used on it, such as the year it was put into use, the manufacturer and model, any options, kits or modifications from the basic model and the number of hours and conditions it has been used it. This allows them to gather any additional information that they need to know to appraise the equipment, including information on past equipment that they've already appraised.
• They'll then ask about current issues, maintenance and repair that has been done on each piece of equipment. This provides them with some background on how well the equipment has been cared for and what condition it may be in. This is part of the process of determining the remaining useful lifespan for the machinery, which is a vital part of determining its value. As an example, you would almost certainly pay more for a piece of machinery that is expected to remain in productive use for ten years versus one that was expected to fail within a couple years.
• Next, they'll examine the equipment itself. This allows them to see if there are any potential issues that have not been caught yet. This can include issues such as small hydraulic leaks, pulleys that are going out of alignment, gears that are beginning to wear or slip, lowering performance levels or similar indicators that can lead to expensive repairs or potential issues down the road, giving you the opportunity to make vital repairs.
• Additionally, the appraiser will take into consideration unique challenges that face your industry, whether they're specific to your industry or to the market as a whole. This can include issues such as a market downturn that has caused a large surplus of that type of equipment on the market, driving down prices or whether there's strong growth in another region that can be leveraged to sell older equipment at the best possible premium.

When you're having a production line equipment appraisal performed, there are any number of factors that can come into effect during the process that will need to be considered. However, the appraisal report that you receive from a certified equipment appraiser will provide you with much more information beyond the value of your production line. Because an equipment appraiser works with a wide range of machinery on a daily basis, they'll be able to compare your equipment to other machinery they've looked at and give you valuable insights, such as prospective failure points, longevity and other information that will help you make smart decisions about your production line management.