Whether you're dealing with a potential court case, the sale of your company, a bad tax assessment or that loan that will allow you to significantly expand your operations, it's vital that you work with accurate numbers to ensure that the process goes smoothly with no unwelcome surprises. If you've been dealing with an appraiser and something doesn't seem quite right about their numbers, it may be time to think about getting a second opinion. In that case, you may want to look at having appraisal review work completed that allows you to ensure the accuracy of the final result. Here's a quick look at what appraisal review is, what it entails and what you can expect from the process.

Concerned About Accuracy? Consider Appraisal Review Work!

Let's start by talking about the reasons that appraisal reviews are performed. If an appraisal was performed by a company that is not certified, it's often easier to verify the existing work than to have an entire new appraisal performed. This allows a fresh set of eyes to check the figures, calculations and information used for accuracy, providing you with details on where it has worked out and where inaccuracies may lie. Another area where appraisal reviews are used is during the audit process. When a piece of equipment is valued at a particular amount that doesn't seem quite right, having an appraisal review performed allows you to see whether that original figure was accurate or if it needs to be revised.

Among the issues that may make you choose to have an appraisal review performed is having business property in a declining market, a comparison to a business that isn't as close a match as it should be or other aspects of your business that could potentially open you up to a risky financial situation. The appraisal review goes over all of the processes and figures used in the original appraisal, checking those figures and the calculations that were used with them for accuracy. During this time, the appraiser also keeps an eye out for omissions that may have accidentally occurred, such as failing to list an upgrade or an add-on kit for a piece of equipment that would drastically raise its value to potential purchasers.

An appraisal review may also be requested by a financial institution if it feels that the equipment being financed represents a specific potential risk to your business and its ability to repay financing. As an example, if you are purchasing used equipment and wish to finance it through your bank, you may need to provide an appraisal review to ensure the accuracy of the original appraisal prior to the loan being approved.

When you have appraisal review work performed on a previous appraisal, you can quickly determine where the issue with the original appraisal was or if there was in fact an issue at all. This can be a very handy tool for audits and similar work where verification of value is vital to the integrity of the final figures that are determined. However, that doesn't mean just anyone who knows a little bit about pricing is the way to go! You need a certified equipment appraisal specialist who understands the fine nuances of machinery value so that they are using standardized, tested methodologies that will provide you with the most accurate results.

There are few things you can face as a business owner as scary as facing a potential lawsuit or court case. It has the potential to end your business if it isn't handled correctly and can impact your livelihood for years, or even decades, to come. However, when your machinery is involved, nothing can change things as quickly as bringing in an equipment appraiser as expert witness in your case. It can quickly make the difference between successfully proving your claims and suffering from a devastating financial loss at your business. Here's a quick look at what happens when you decide to use an expert as a witness in your court case.

What Happens When You Use an Appraiser as Expert Witness?

• Provides credibility. An expert witness is expected to have deep knowledge of a subject, something that a certified equipment appraiser has in spades. Their professional credentials provide proof of their knowledge while their expertise provides your side of the case with strong credibility with regards to the value and condition of your equipment. Their background and experience is weighed in to deliver a true level of expertise that will be difficult to impossible for the opposition to disprove or counter in the process.
• Proves equipment values. When you work with a certified equipment appraiser, they're able to walk the court through the process of determining the value of machinery. The methodologies that they've been taught to use in the field have had decades of testing in a wide range of situations, including legal settings. This means that their calculation of your machinery values will hold up with other methods of determining value fall well short of the level of accuracy demanded by a court case.
• Documents accurate condition. What condition was your equipment in during the time in question for the court case? It's not uncommon for one side or the other to inflate or deflate the value of equipment by making spurious accusations about the equipment's value or that it's being downplayed by the other side. Having a certified equipment appraiser represent your equipment's condition documents that condition and its relative value for the court with no emotional arguments, just solid, stated facts for the record.
• Reduces the opposition's credibility. Is the other side making a lot of accusations and wild claims about your machinery, its condition and its value? Whatever your court case is about, it's expected that both sides will exaggerate or downplay certain aspects to improve their standing. Bringing in an expert witness to speak to the specifics of your equipment helps prove your credibility while reducing the credibility of the opposition's side of the argument, putting your business in a better light and position in the case.

When you choose to use an equipment appraiser as expert witness to provide testimony for your court case or lawsuit, you can better defend your position, especially if your company or equipment values have been blown out of proportion by the opposing side in the case. Using an equipment appraiser as a witness can help in any number of ways, but you'll want to make sure you work with a certified appraiser to ensure that the testimony they provide can be backed up by solid figures and methodologies.

Companies in many diverse forms of commerce such as construction, automotive manufacturing, tool and die fabrication, aerospace, and foundries often rely on the use of heavy-duty industrial equipment and freight vehicles to get the job done. Quite often during the course of ordinary business, an accurate accounting or estimation of the value of that equipment is required. That is when your company needs the services of a professional industrial equipment appraiser.

The need for an accurate equipment appraisal might be based on a business reason, or it could be required by a bank, lender, government entity, court, or accountant. At these times a simple book value or “guesstimate” of the equipment value simply will not do. An industrial equipment appraiser provides an accurate, legally defensible estimate of the value of equipment in accordance with the guidelines and Uniform Standards of Professional Appraisal Practice (USPAP). Here are just a few of the many reasons why your business might need the services of an industrial equipment appraiser:

• Business is good: If you are thinking of merging, selling or expanding your business, you want to have a good handle on how much it is worth. A certified appraisal gives you leverage with potential buyers, and is often required by banks to justify collateral estimates if you decide to take out a loan to finance your strategic growth. Effective in January 2014, the Small Business Administration updated and clarified its Standard Operating Procedures regarding appraisals and valuations accepted for its Lender and Development Company Loan Programs.
• Business is bad: Sometimes it happens that a business just doesn’t work out, and you need to have an appraisal performed for a partnership dissolution or bankruptcy filing.
• Always be prepared: We never expect the worst-case scenario to happen, but we certainly need to be prepared. An industrial accident or natural disaster might occur which would require definitive proof of the equipment valuation for insurance reimbursement purposes. If you can’t prove what the equipment is worth, the insurance company might be left to its own best guesses and that seldom works in your favor.
• Tax and accounting purposes: Quite often your accountant will request an equipment appraisal to back up tax return and depreciation schedule information. Also, businesses that are converting from a C to an S Corporation will require an up-to-date appraisal to verify the value of the company at the time of the conversion.
• Shareholder accounting and Sarbanes-Oxley compliance: Public companies have an even higher degree of fiduciary responsibility to shareholders. They also have to be in compliance with the Corporate Responsibility Act of 2002, which was designed to improve financial disclosures from corporations. Provisions of this Act require increased corporate responsibility for financial statement accuracy and impose severe criminal penalties for non-compliance.
• Personal needs: In certain companies, personal needs will sometimes overlap with business functions. If an owner or major shareholder is going through a divorce, setting up an estate, or creating a personal trust, an accurate accounting of the business assets and equipment will be required.
• Lawsuits: Businesses that are splitting up, or those that are called to defend themselves in a court situation, will need to justify the stated value of the company.

An accredited appraiser takes many factors into consideration to arrive at an accurate equipment appraisal. The skills and experience of an unbiased industrial equipment appraiser will result in a Certified Appraisal Report that you can rely on with confidence to meet any individual reporting requirement.

When you're working with a heavy equipment appraiser, it's common to wonder what makes them stand apart from regular appraisers. Are they really that different from one of the other? You might be surprised at the answer. The level of education, experience and expertise that is used during the appraisal process by a heavy equipment valuation specialist can be truly astounding. Here's a quick look at some of the differences between a standard appraiser and a heavy equipment appraiser as well as some of the additional training that goes into the process of developing the specialty.

How is a heavy equipment appraiser different than a regular appraiser?

• How specialized is your machinery? Though a lot of heavy equipment is similar to other models on the market, there are often any number of features and kits that set your equipment off from the rest of the pack. A regular appraiser will deal with a wide range of items, from cars to copy machines to computers. A heavy equipment appraisal specialist, on the other hand, focuses only on heavy machinery. Because they don't deal with all the rest of the equipment on the market, they're familiar with the many ways that your machinery is unique. This allows them to focus on the fact that you've got the hydraulics upgrade kit and optional backhoe for your loader and value them appropriately.
• What condition is your machinery in? A regular appraiser have a grasp of the fact that it's pretty common for construction equipment to have a few scratches and dents in the course of its daily use, but are they able to recognize the difference between everyday wear and real abuse in the field? Because a heavy equipment valuator is constantly working with machinery that is active in the field, they have a strong grasp of what that equipment should look like and how it should act and react on the job site. This allows them to make an appropriate valuation because they know that your equipment is used, not abused, and they calculate the value of that machinery accordingly.
• Are there any potential failures that can be prevented to save money and improve value? A regular appraiser doesn't know your heavy equipment as intimately as a heavy equipment specialist does. Because they work with only heavy equipment on a daily basis, they get to know that equipment, including its potential points of failure. They're familiar with many of the signs that key components that are common issues with a particular model are starting to fail, such as a pulley going slightly out of alignment, a hydraulic leak that doesn't seem like much now and similar areas of concern. This allows you to make inexpensive repairs on smaller systems before they crash the entire machine.

When you need to have heavy machinery valued and have the choice between a regular appraiser and a heavy equipment appraiser, understanding the differences between the two can mean hiring the right person for the job or ending up with a poor appraisal that doesn't take the intricacies of your equipment into account. Make sure that when you're having your equipment appraised that you insist on a certified equipment appraiser that has experience in your industry to ensure that you're getting your money's worth and an exceptional appraisal report for your investment.

When you work in agriculture, your equipment represents a large portion of your investment in your farm. with combines costing hundreds of thousands of dollars, many farmers are ready to invest in used equipment. But before you sell your older machinery, have you had a farm equipment appraiser take a solid look at it and provide you with a written valuation report? If you haven't, you may be missing out on potential profits that you can then roll into your farm to improve your operation and situation. Here's a quick look at several reasons why you should always have a farm equipment valuation specialist provide you with an appraisal report before you sell it.

3 reasons why you should have a farm equipment appraiser check your equipment before selling

1. Can you get more than you're asking for machinery before you scare off potential buyers with prices that are too high? Not knowing your equipment's value in the first place may lead you to make assumptions about what it's actually worth based on the local advertisements, online ads or what your neighbor may have gotten for similar machinery not that long ago. A qualified equipment valuation specialist can determine exactly what your equipment is worth, giving you a solid starting point and a great tool for negotiation.
2. Are there any ways you can make simple repairs that quickly improve the value of your machinery? When an equipment appraiser looks at your machinery to determine its value, it's important to remember that they work with machinery like yours all the time. This means that they're familiar with all of its quirks, including common points of failure for specific manufacturers and models. If they see something that may appear just a touch off, they may be able to advise you about repairs that will prevent more expensive repairs and improve value for your buyers.
3. Is your equipment in demand in other parts of the country? If your equipment is not in high demand because of shifting market prices or changing environments, it may still be in demand in other areas. When you work with qualified equipment appraisers, you're seeing professionals who stay on top of all of the latest developments in agriculture. They can tell you whether you're in a good place to sell your equipment or if you may want to look elsewhere, such as an online auction site or similar option, to sell your equipment at the best possible profit in another part of the country or even world.

By having a farm equipment appraiser check your machinery before you sell it, you can improve the profit on your sale and have more money to invest in your operation. But don't settle for your local ag equipment dealership, whose sales reps and appraisers may think they have a vested interest in skewing the results of their appraisal to their own benefit by offering you more or less than your machinery is worth in hope of a quick sale. Don't settle for anything less than a certified equipment appraiser, who has solid experience and expertise in determining the value of your machinery equipment and can provide you with solid advice as to your equipment's real-world value.