Many businesses that require machinery & equipment appraisal reports aren’t actually in the business of buying and selling equipment, such as banks, leasing companies, insurance companies, business owners, and investors. Therefore, the most reasonable level of value to expect or realize in a sale would be liquidation value. These estimates are more in line with selling equipment to dealers or auction companies who are in the buy/sell business.
There are two types of liquidation values to consider:
Orderly Liquidation Value is defined as:
The estimated gross amount, expressed in terms of money, that could be typically realized from a liquidation sale, given a reasonable period of time to find a purchaser, with the seller being compelled to sell on an as-is, where-is basis, as of a specific date.
This premise is in line with a private sale to an equipment dealer with some compulsion to sell in a short period of time typically 3-6 months.
Forced Liquidation Value is defined as:
The estimated gross amount, expressed in terms of money, could be typically realized from a properly advertised and conducted public auction, with the seller being compelled to sell with a sense of immediacy on an as-is, where-is basis, as of a specific date.
These types of sales basically sacrifice price, or value, for time, and can be conducted in 60-90 days for a quick realization of cash.
If you are a business or individual facing liquidation, or just are in need of obtaining an understanding of these types of liquidation values, contact Equipment Appraisal Services today to learn more about our accredited equipment appraisal reports with certification. Each equipment appraisal report is prepared by a qualified senior member of the American Society of Appraisers.