Equipment Appraisals Are Necessary In The Marketplace
Equipment appraisals are an essential part of any business that uses machinery or equipment. Appraisals are used to determine the value of equipment for various reasons, such as tax purposes, financing, insurance, and mergers and acquisitions. In this article, we will explore what equipment appraisals are, why they are important, and how they are conducted.
What is an Equipment Appraisal?
An equipment appraisal is an assessment of the value of machinery or equipment. The purpose of an appraisal is to determine the fair market value of the equipment. The value is determined by considering the condition, age, usage, and other relevant factors.
Why are Equipment Appraisals Important?
Equipment appraisals are important for several reasons. First, appraisals are necessary for tax purposes. The IRS requires that businesses report the value of their assets accurately. An equipment appraisal can help businesses to ensure that they are reporting the correct value of their equipment.
Second, appraisals are important for financing purposes. Lenders require an accurate assessment of the value of the equipment before they provide financing. An equipment appraisal can help businesses to secure financing at a reasonable rate.
Third, appraisals are important for insurance purposes. Insurance companies require businesses to have accurate assessments of the value of their equipment before they provide coverage. An equipment appraisal can help businesses to ensure that they have adequate insurance coverage for their equipment.
Fourth, appraisals are important for mergers and acquisitions. When businesses merge or acquire other businesses, they need to know the value of the equipment that they are acquiring. An equipment appraisal can help businesses to determine the value of the equipment accurately.
How are Equipment Appraisals Conducted?
Equipment appraisals are conducted by professional appraisers who specialize in this type of work. The appraiser will visit the business and inspect the equipment. They will take photographs and record information about the equipment, such as the make, model, and serial number.
The appraiser will also consider other factors that affect the value of the equipment, such as the condition, age, and usage. They may also research the market to determine the fair market value of similar equipment.
Once the appraiser has gathered all of the necessary information, they will prepare a written report that outlines the value of the equipment. The report will include a detailed description of the equipment, as well as the appraiser's methodology and findings.
In many cases, the Certified Equipment Appraiser will conduct a desktop appraisal. A desktop appraisal is a hypothetical determination of value based solely upon information provided by the client and conducted without benefit of physical inspection. Desktop appraisals are common due to time, travel, and cost considerations.
Who Performs Equipment Appraisals?
Always hire a Certified Appraiser from a firm that has obtained necessary training from one a recognized Institutes such as the Nebb Institute or the Equipment Value Institute. Truman Mox, Inc is a Certified Equipment Appraiser that works across the country. Your Certified Appraiser should be insured and will provide you with a USPAP complaint appraisal report.
What is the Cost of an Equipment Appraisal?
The cost of an equipment appraisal is going to be based on several factors such as amount of items, rarity of the subjects and location. Desktop appraisals are typically lower in price than an on-site appraisal due to less travel and hours involved. It is common for single item appraisals to range for approximately $250. Larger assignments that involve numerous items and travel can cost in excess of $5,000.
In conclusion, equipment appraisals are an essential part of any business that uses machinery or equipment. They are necessary for tax purposes, financing, insurance, and mergers and acquisitions. Equipment appraisals are conducted by professional appraisers who specialize in this type of work. If you are a business owner, it is important to have your equipment appraised to ensure that you are reporting the correct value of your assets, securing financing at a reasonable rate, and have adequate insurance coverage.