In today’s economy, the value of tangible assets is questioned at almost every turn. From financing to insurance to buy/sell agreements, entrepreneurs and their advisors need a value that will hold up to scrutiny with lenders, buyers, IRS, the courts and others.
Cole & Company, Inc.’s Machinery and Equipment Appraisal Service can provide you with a defensible Certified Machinery & Equipment Appraisal Report that will hold up to scrutiny with the IRS, lenders, and others. Our equipment appraisals meet the element of a qualified appraisal pursuant to the SBA’s Standard Operating Procedure for lending purposes and AICPA’s Standards of Valuations #1 for CPA’s.
Needless to say, a Certified Machinery & Equipment Appraisal Report that is USPAP compliant is of the utmost importance to protect you from unsubstantiated and inaccurate values.
Some of the more common uses of a Certified Appraisal include
- Buy/Sell Agreements
- Divorce Settlements
- Retirement Planning
- Estate Planning
- Tax Purposes
- 1031 Exchanges
- Converting from C to S Corp
- Insurable Value
- Mergers and Acquisitions
- Litigation Support
- Trust Planning
- Partnership Dissolution
- Gift Estate Planning
Types of Appraisal Reports
Appraisal Reports can vary depending on the intended use. For example, an Appraisal Report can be intended for multiple users, which is often ordered by lenders who may use the report in loan committees or in conjunction with the SBA. A Restricted Appraisal Report is intended for only one user. These reports typically include an onsite inspection by the appraiser or field investigator to physically inspect and record model numbers, serial numbers, engine hours, modifications and current condition of the asset as well as taking photographs and logging the current use of the asset.
Desktop Appraisal Reports are a determination of value based solely upon information provided by the client and conducted without benefit of physical inspection. Desktop Appraisal Reports are common due to time, travel and cost considerations.
Standards of Value
There are varying Standards of Value under which equipment may be valued. Some of the more common include:
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 a reasonable knowledge of relevant facts, as of a specific date.
Fair Market Value in Continued Use 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, as of a specific date and assuming the business earnings support the value reported, without verification.
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.
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.
It is important for you to know that the equipment appraiser you assign to the scope of work you need performed, has the knowledge, experience, ethics, and certification to provide you with a “Certified” Machinery & Equipment Appraisal Report.
At Cole & Company, Inc., a Certified Machinery & Equipment Appraiser (CMEA) has received formal comprehensive training and successfully passed a written examination, submitted a Summary Appraisal Report evaluated by a Board of Peers and is experienced in working with equipment of all types.
A CMEA upholds the ethics and guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP), promulgated and authorized by Congress as the Source of Appraisal Standards and Appraiser Qualifications.
We are also one of the few Valuation Firms that has years of transaction experience to draw on when valuing privately held businesses.