Equipment Appraisal Services
Monarch Equipment Appraisals is the Colorado local single source for certified machinery & equipment appraisers in Colorado.
Inventory Valuations are a type of appraisal we perform as well.
What Is a Machinery/Equipment Appraisal?
A machinery and/or equipment appraisal is the independent and unbiased process of determining the supportable opinion of value of tangible assets as of a specific date. Appraisals can be performed for a variety of value premises from fair market value in place and in use, to forced liquidation value. Monarch’s machinery & equipment appraisals are performed by professional appraisers experienced in all aspects of machinery/equipment as well as the science and art of machinery & equipment appraisals.
The types of value below are the ones used most frequently and are mostly based on the definitions published by the American Society of Appraisers’ Machinery and Technical Specialties committee:
Fair Market Value. Fair market value is an opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.
This is considered synonymous with “market value” and is based on the Internal Revenue Service definition in IRS Revenue Ruling 59-60 and the following U.S. Regulations: 26 CFR 1.170A-1 – Charitable Donations, 26 CFR 20.2031-1(b) – Estate Tax, and 26 CFR 25.2512-1 – Gift Tax.
Typical uses: Bank loans & financing, sales of assets, charitable donation, property (ad valorem) taxes, insurance, estate planning.
Orderly Liquidation Value. Orderly liquidation value is an opinion of the gross amount, expressed in terms of money, that typically could be realized from a liquidation sale, given a reasonable period of time to find a purchaser (or purchasers), with the seller being compelled to sell on an as-is, where-is basis, as of a specific date.
This premise of value reflects the sale of an asset by a motivated seller after an adequate marketing period to sell the property.
Typical uses: Bank loans & financing, property transfer, insurance.
Forced Liquidation Value. Forced liquidation value is an opinion of the gross amount, expressed in terms of money, that typically could be 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.
Typical uses: Bank loans & financing, property transfer, insurance, business liquidation.
Fair Value. Fair value is the price that would be received for an asset or paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date. (Definition per FASB Statement No. 157 Fair Value Measurement, Paragraph 5 as referred to in FASB Statement No. 141r Business Combinations, Paragraph 3. b. and SFAS No. 142, paragraph 23).
Typical uses: Purchase price allocation, financial reporting
Field. An onsite personal inspection of machinery and equipment. Photos and specifications are gathered by an inspector.
Desktop. This method provides an estimate of machinery and equipment value based solely on information provided by the client. These are common due to cost and travel restrictions.
What Appraisal Standards are Used?
All appraisals are performed in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation. Compliance with industry standards ensures that proven peer-reviewed appraisal methods are used to develop defendable opinions of value.
Why Perform a Machinery/Equipment Appraisal?
As part of a formal business valuation
Mergers & Acquisitions, Litigation Support, Divorce, Buy-Out Agreements, Estate Settlements, ESOPs, Partnership Dissolution, Foreclosures, Retirement Planning, Trust Planning, “C” Corp. to “S” Corp. Conversion, Business Liquidation, Lender “Special Assets” Resolution
Purchase price allocation, Asset impairment analysis, Fair value measurement
Determining useful life of equipment
Determining depreciation of equipment
Appraisal Reports Sample Equipment Report