Equipment Appraisal Blog | Understanding Machinery Appraisals

It may be an anomaly brought about, in part, by the pandemic, or it might just be a coincidence. The fact is that we are seeing a lot more divorce cases happening in 2021 than in previous years. As a result, requests for valuation services in this arena have been on the rise.

Equipment and business appraisers have been busy working with divorce attorneys and their clients, as the age-old dispute between separated spouses revolves around a fair separation of assets. When both parties are co-owners in a business, there is going to be a need for an independent appraisal from an experienced valuation firm, which can look to assist in facilitating a settlement. If the shared business includes significant tangible assets, such as construction and manufacturing machinery, trucks and trailers, or any type of personal property, the need for an accredited machinery and equipment appraisal will be important. A certified business appraiser will then consider these tangible values in their overall analysis.

Appraisers act as unbiased neutral parties, providing a fair market value for your equipment and associated business. The intention is to put to rest the concerns either party may have in regard to prior assumptions or discussions on their company’s worth.

In certain cases, both sides in the divorce will engage their own appraisers with the potential for arbitration or litigation to determine the most credible report or allow consideration to both valuations if they are not too far apart. Regardless of the circumstances, it is important to engage with an accredited or certified appraiser with the experience and credentials to effectively assist in the process.

If the business is still operating and in decent financial shape, the Fair Market Value of the assets would be the appropriate measurement level. If the company has been recently idle, or there are plans to close up shop in the very near future, a liquidation premise may need consideration. Ideally, both parties are on the same page with the overall process, however, if this is not the case, the party who engaged the experienced appraiser should have an advantage in the ongoing proceedings.

Understanding all that is involved during a divorce, including the need for an accredited or certified equipment appraisal can ensure you are receiving the best settlement possible.

When your medical practice is doing well, it can be tempting to upgrade your machinery or open a new location. But how do you know if that move will be a good investment or a bad risk? Medical equipment appraisal can provide you with the information you need about some of your practice's most expensive assets to help you make an educated decision on these types of issues. Here's more information on how it does this.

How Medical Equipment Appraisal Helps Support Your Bottom Line

How much is your medical equipment worth? You might be surprised just how far that number can vary. When you've got an equipment sales rep in the office, they may say that it's worth very little, especially compared to their latest model. On the other hand, they may say it's worth a great deal, especially when they're willing to accept it as a trade in on the same latest model. Neither number is necessarily an accurate assessment of the machinery's worth.

Looking at what similar models have sold for may not give you a good picture either. How well were those machines cared for? Was the industry in a strong or weak cycle when they were sold? Is there demand for that equipment in the industry because of new techniques or practices? There are a number of different factors that can impact your equipment's value. Working with someone who understands these different factors can make all the difference in determining your equipment's actual value.

Imagine if you had a piece of equipment that had been ill maintained over the years or had been damaged in a flood or fire. It still operates, but not as well as it should, or it's probably going to have a shorter useable lifespan than expected. What happens when you use a standard depreciation table in a tax document to depreciate value? The depreciated value will be stretched out over a longer period of time than the machinery will remain in usable condition. This means it remains on your books as an asset even when it actually has no reasonable value.

Another piece of equipment could be very well maintained. It's always had proper maintenance and has been used within its specified parameters, ensuring that it's in excellent conditions. It can deliver productive results for your practice years after it's been fully depreciated. That means it has no value in your balance sheet, but provides real value to your practice on a daily basis. The first machine creates false value, while the second isn't recognized for the value it delivers. This can create inaccuracies in your balance sheet and make it difficult to make smart financial decisions based on your practice's asset worth.

By getting a medical equipment appraisal, you can ensure that you have a much better idea of where your practice sits financially. With this information in hand, you can make smarter decisions on new investments, whether it's to open up a new location or upgrade your assets to allow for further services for your patients. However, if you're not working with a certified equipment appraiser, you may be getting bad information. Certified appraisers follow accepted practices to ensure they provide you with accurate values for your medical equipment.

When you run a big rig and need to have a truck appraisals conducted, how do you know what will come into consideration during the process? Knowing what the equipment appraiser is looking for helps you know how to judge equipment values, whether you're considering making a new purchase or figuring out when to upgrade from your old standby. Here are a few things to keep in mind when having your semi tractor appraised:

Valuing a Semi Part 1: Truck Appraisals

• Show us the paper. Though it seems like it wouldn't have as much to do with your truck's machinery valuation, having proof of maintenance and repairs is vital to the process. Whether you keep a regular maintenance and repair log, have an envelope with all the repair receipts in it or can get a copy of the records from the shop you always use, documentation helps prove good care of your truck.
• In good condition. Though it's normal to have some average wear and tear on your truck, it should show that it has been keep up, whether that's through regular washing, a clean interior or an engine compartment that is well kept and in good repair. Much like documentation, this step also proves that your truck has been well maintained.
• Mileage matches wear. Though most people wouldn't dream of messing with the odometer, some shady shops will try to tamper with it to gain a few dollars in the sale price. Equipment appraisals will take a good look at the wear and tear of the entire vehicle, and if it appears to have much more wear and tear than the odometer would support, you may want to have documentation on hand in the form of mileage logs or similar paperwork to back up your claim. Excessive wear is often related to early failure of a variety of systems, lowering the final appraised value.
• Free from signs of abuse. Much like the mileage concern above, this step is to ensure that the truck will continue to operate for an expected period of time. Abuse can include repairs that have not been seen to, too much play in steering, suspension, brakes and similar systems, poorly made repairs, cracks or dents, bends in the frame and similar concerns. Trucks that have been hard used and not cared for often have much earlier failure rates than trucks that have been well maintained.
• Manufacturer-added or -approved features. Everyone can buy a basic truck, but one that has a few more bells and whistles will demand a higher price in the market, which is reflected in the appraised value. But what about additions that were manufactured by third parties or part of customization outside the manufacturer's specifications? You may actually end up lowering your truck's value. Why? If a feature was added that causes additional wear and tear on a particular system or circumvents a safety feature, it can actually cause the truck to fail sooner instead of adding value to a normal life cycle.

Knowing what to expect during a machine appraisal helps you get through the process quickly and easily by allowing you to have everything you need on hand and accessible for the process. But now that you know what to expect in truck appraisals, what about the trailer? Tune in next time for the second part of this series, dealing with trailer appraisals, and don't forget to contact us for all your appraisal needs.