CAPITAL, FACILITY, INDUSTRIAL ASSETS APPRAISAL

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 What is a capital or industrial asset's really worth? What do you do? Guess?  Go by book value? Unfortunately, guessing  and book values are risky and inaccurate.

We have the expertise, certification and knowledge to conduct an independent third party industry and asset appraisal. Therefore, the value of any item is substantiated and reflects the realistic true market value of an item. In addition, we abide by the regulations and ethics of the Uniform Standards of Professional Appraisal Practice (USPAP).

 Agricultural Concerns

•Farm Equipment •Fertilizer Distributing Equipment •Livestock •Winery & Vineyard •Hay Production

Aviation & Marine Industries  

•Airplanes/Aviation Equipment •Barges/Tugs •Boats/Vessels

Commercial Services     

•Chemical Processing •Coating Companies •Commercial Bakeries •Dairy and Ice Cream Plants •Food Processing •Graphic Arts Companies •Material Testing •Painting Companies •Printing Companies

Construction Equipment & Vehicles Dealers     

•Construction Equipment •National & Local Car Dealerships •Trucking Companies

Contracting Companies     

•Excavation Contractors •Fire Sprinkler Companies •Flooring Contractors •General Contractors •Paving Contractors •Petroleum Specialists •Plumbing Contractors •Pre-stressed Concrete Forming •Stone Contractors •Utility Contractors

Environmental Services  

•Fertilizer Manufacturing Equipment •Soil Remediation Equipment •Wastewater Treatment Facility

Industrial Manufacturing    

•Bag Printing & Manufacturing •Boiler Fabrication & Repair •Door Manufacturing •Injection Molding •Metal Production •Tank Fabrication

Timber & Lumber Industry     •Lumber Manufacturing •Milling Companies •Pressure Treated Lumber •Woodworking Companies

 This practice is performed for a number of professionals, including banks, attorneys, insurance companies and CPA's for a number of purposes including:

• SBA Loans
• Partnerships
• Estate Settlements
• 1031 Exchanges
• Trust Agreements
• Merger and Acquisitions
• Retirement Planning
• Gifting for Tax Purposes
• Litigation Support
• Tax Purposes
• Financing
• Insurable Value
• Buy/Sell Agreements
• Divorce Settlements 

 All of our machinery and equipment (M&E) appraisal work is supervised and performed by certified appraisers.   The steps in a typical machinery and equipment appraisal assignment include:

Identifying the assets to be appraised
Defining the purpose of the appraisal
Establishing the valuation date for the appraisal
Determining the appropriate valuation concepts and approaches to be utilized
Determining the type of valuation study to be completed
Selecting the type of appraisal report to be provided
Checking the availability of data and information

IDENTIFICATION OF ASSETS
M&E consists of machinery, furniture, fixtures, office and telecommunications equipment, computer and networking equipment, vehicles, etc. Appraisals can be performed for individual pieces of equipment, a production line, a complete operating facility, or multiple operating facilities. 

 An appraisal of equipment or machinery can utilize different types of valuation concepts. Some of the typical concepts for an equipment valuation include:

• Fair Market Value In Continued Use
• Fair Market Value – Installed
• Fair Market Value – Removal
• Orderly Liquidation Value In Place
• Orderly Liquidation Value
• Forced Liquidation or Auction Value
• Salvage Value
• Scrap Value
• Insurance Replacement Cost
• Insurance Value Depreciated

The definitions of these concepts as defined by Valuing Machinery and Equipment, the American Society of Appraisers (2000), are as follows:

Fair Market Value In Continued Use is 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 all relevant facts, including installation, as of a specific date, and assuming that the earnings support the value reported.

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 a 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 does not have to be supported by the business earnings.

Fair Market Value Removal is the estimated amount, expressed in terms of money, that may reasonably be expected for a property, 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, considering the cost of removal of the property to another location.

Orderly Liquidation Value In Place is the estimated gross amount, expressed in terms of money, that could typically be realized from a failed facility, assuming that the entire facility would be sold intact within a limited time to complete the sale, as of a specific date.

Orderly Liquidation Value is 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(s) with the seller being compelled to sell on an as is, where is basis as of a specific date.

Forced Liquidation or Auction Value is the estimated gross amount, expressed in terms of money, that 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.

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

Insurance Replacement Cost is the replacement cost new as defined in the insurance policy less the replacement cost new of the items specifically excluded in the policy, if any, as of a specific date.

Insurance Value Depreciated is the insurance replacement cost new less accrued depreciation considered for insurance purposes as defined in the insurance policy or other agreements, as of a specific date.

INCOME, COST, AND MARKET APPROACHES TO VALUE
The income approach is based on the present value of cash flow that an asset can be expected to generate during its remaining life. This approach is based on a forecast of the business income and expenses that the property will generate over a given period of time. It assumes that the value of the property is dependent on the ability of all the assets to earn a reasonable return. This approach is best utilized for determining the business enterprise value.

The cost approach is based on the concept of replacement or reproduction cost as an indicator of value. A prudent investor would not be expected to pay more for an item than the amount for which it could be purchased new. Further, to the extent that a particular item provides less utility than a new one, its value will be less than the cost of a new replacement or reproduction. To account for this difference, the replacement/reproduction cost new is adjusted for losses in value due to physical depreciation, functional obsolescence, and economic obsolescence.

The market approach involves a direct comparison of the property being appraised to similar properties that have sold in the same or in a similar market. This approach is based on the principle of substitution which implies that a prudent person will not pay more to buy a property than it will cost to buy a comparable substitute property