Business Asset Valuation Services

There are three (3) basic types of appraisals that can be performed, either a Restricted Use, Summary, or Self-Contained report.

A Restricted Use Appraisal report is typically requested by individuals that are somewhat familiar with the asset or group of assets. The Restricted Use Appraisal is a limited report that typically only states the appraisers value conclusion with very limited explanation. Many clients request a Restricted Use Appraisal when time is of the essence. This type of appraisal report is considered the least costly of the three (3) report types. This particular type of report can usually be conducted from the appraisers desk. A common name associated with the Restricted Use Appraisal is known as a “desk top appraisal” . This type of appraisal can be performed from the appraisers desk relying upon no physical inspection of the asset. The appraiser relies on data furnished by the client including pictures of the asset, maintenance records and any relevant material on the asset. The appraiser must disclose in the report the actions taken or not taken in deriving the data used to support the value conclusion of the asset. The Restricted Use  Appraisal is definitely less expensive than a Summary or Self-Contained appraisal, however it is considered less reliable.

A Summary Appraisal report typically includes the appraiser performing a full physical inspection of the asset and developing all applicable approaches to value if deemed applicable to the asset and appraisal problem. The appraiser can physically see the asset to appreciate the quality, condition and productiveness of the asset. This particular appraisal will include all market research, assemblage of pertinent data (listing and classifying), listing of appropriate analytical techniques and reporting of knowledge, experience and judgment. This type of appraisal is slightly more costly but the final results are more comprehensive, illustrative and reliable. The Summary Appraisal report is the most frequently requested.

 

A Self-Contained Appraisal report typically includes the appraiser performing a full physical inspection of the asset, and developing all applicable approaches that pertain to the asset and appraisal problem. The Self-Contained Appraisal report provides all the appraisers data and rationale that was utilized in the development of the appraisal analysis. All conclusions and data sources are fully disclosed and discussed. The Self-Contained Appraisal is definitely more expensive than the above appraisal types, however it is considerd more reliable. This type of appraisal is the least requested due to the monetary cost, and the amount of discussion pertaining to the analysis is considered over kill.

 

 A qualified machinery and equipment appraiser should be able to develop a credible appraisal report defining any of the below recognized value concepts. Typical machinery and equipment appraisal assignments include manufacturing equipment, transportation equipment, medical equipment, processing equipment, office equipment, construction equipment, industrial equipment and personal property assets. In situations where the asset is involved in an acqusition or transfer a "Fair Market Value", "Fair Market Value In Continued Use" or Replacement Cost New" value concept would be appropriate. In some cases these assets are relocated or removed, therefore a "Fair Market Value Installed" or "Fair Market Value Removal" appraisal is necessary.  When an asset or group of assets are involved in a failed business operation a "Orderly Liquidation Value", "Liquidation Value In Place", or "Forced Liquidation Value" appraisal may be appropriate.

 

Listed below are the most recognized and accepted appraisal concepts. Call RogerMillerAppraisal.Com today to tailor fit an appropriate value concept for your asset or group of assets.

 

Fair Market Value
The estimated amount, expressed in terms of money, which may be reasonably expected for a property in an exchange between a willing buyer and a willing seller, with equity to both, neither under any compulsion to buy or sell, and both fully aware of all relevant facts, as of a specific date.

Fair Market Value in Continued Use
The estimated amount, expressed in terms of money, that may reasonably be expected for a property in an exchange between a willing buyer and a willing seller, with equity to both, neither under any compulsion to buy or sell, and both fully aware of relevant facts, including, installation, as of a specific date, and assuming that the earnings support the value reported. This amount includes all normal direct and indirect costs, such as installation, and other assemblage costs, to make the property fully operational.

Fair Market Value Installed
Is the estimated amount, expressed in terms of money, that may reasonably be expected for an installed property in an exchange between a willing buyer and willing seller, with equity to both, neither under any compulsion to buy or sell and both fully aware of all relevant facts, including installation, as of a specific date. This amount includes all normal direct and indirect costs, such as installation, and other assemblage costs, to make the property fully operational.

Fair Market Value Removal
Is the estimated amount, expressed in terms of money, which may reasonably be expected for a property between a willing buyer and seller, with equity to both, neither under any compulsion to buy or sell, and both fully aware of relevant facts, as of a specific date, considering that the property will be moved to another location.

Orderly Liquidation Value
Is the estimated gross amount, expressed in terms of money, that could typically be realized from a liquidation sale, given a reasonable period of time to find a purchaser(s), with the seller being compelled to sell on an “as-is, where-is” basis, as of a specific date.

Forced Liquidation Value
Is the estimated gross amount, expressed in terms of money, that could be typically realized from a property 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.

Replacement Cost New
Is the current cost new of a similar new property having the nearest equivalent utility as the property being appraised. Is the estimated amount, expressed in terms of money, which may be expected for the whole property or a component of the whole property that is retired from service for use elsewhere, as of a specific date.

Scrap Value
Is the estimated amount, expressed in terms of money, which could be realized for a property if it were sold for its material content, not for a productive use, as of a specific date.

 

The expected residual value of an asset at the end of its economic life span.

The above definitions are derived from ASA’s Valuing Machinery and Equipment