Equipment Appraisal Blog | Understanding Machinery Appraisals

By now, most people are aware of the supply chain crisis and its impact on many parts of our lives, both personal and business. Facing some of the worst of these issues are international importers and exporters who are experiencing unprecedented increases in product costs associated with purchasing, shipping, handling, and significant delivery delays.

From an appraiser's perspective, questions have arisen regarding the impact of this global problem when it comes to valuing the equipment, personal property, and inventory of the assets for these businesses.

Historically, appraisers have largely been engaged to assist in the customs process, which requires an appraisal on property being shipped overseas. While valuation companies are still involved in this area, the overall marketplace and the effects on both new and used machinery & equipment, as well as how long this crisis might persist, is the more prevalent topic today.

Supply chain issues are affecting other businesses on varying levels as well. A good example is the automotive industry. The new vehicle shortage they are experiencing has led to a sharp increase in prices for both new and used cars and trucks. Delivery delays are also causing significant price increases at grocery stores, furniture retailers, building construction firms, manufacturing companies, and others.

When valuing machinery & equipment in these markets and industries, an appraiser will research and analyze each situation, and determine a reasonable approach to measuring this impact, especially if they believe these supply chain issues are going to continue well into the coming year. Given the uniqueness of this situation, this will likely involve a subjective opinion from the appraiser based on the information uncovered, the level of change from more normal conditions, and the short or long-term effects this will have on the market and the assets involved.

When the need for an appraisal occurs in your import or export business, ensure that you engage with an accredited or certified valuation expert with the experience required to deliver reasonable and supportable opinions.

Dealing in the international trade business, you may have a need to carefully document the current value of used machinery & equipment, especially if the bill of sale is not available. How do you support this value to ensure your assets pass through customs. One option is to obtain an equipment appraisal to back up your transaction, however, it is important the appraiser has the accreditation and experience necessary to complete the valuation.

Here are some details on how an equipment appraisal from an accredited or certified equipment appraiser can help provide documentation that will make your customs experience go more smoothly:

To avoid potential delays and troubles with the import & export customs process involving machinery & equipment, considering an appraisal that supports the current value of your assets can go a long way to alleviating this. The appraisal report follows certain methodologies and procedures that are universally recognized, giving custom’s officials a higher comfort level, leading to less scrutiny and avoiding potential delays in clearing the machinery for transit.

The legal paperwork can be overwhelming during the Import and export process, and if not completed properly, can lead to all kinds of delays and additional expenses with customs. With an equipment valuation in hand, completed by an experienced accredited appraiser, supporting the current value, you can resolve many of these situations in a timely fashion.

An accredited or certified appraisal report is better able to stand up to scrutiny than as it is clearly independent and unbiased. Working with a less experienced appraiser could lead to a higher level of scrutiny as the report will not hold up to the accepted standards used in the valuation field. The accreditation and certification process includes instruction in standardized appraisal methodology, and the appraiser signs a certification letter as part of every valuation performed.

When your business deals with machinery in the international marketplace, consider the engagement of an experienced equipment appraiser to assist you in the documentation process. At equipmentappraisal.com, we would be happy to work with you in this endeavor.