Leased Equipment Appraisals: 2 of 2

April 16, 2013

leased equipment appraisalAs pointed out in the previous Leased Equipment post, today’s equipment lessor must be more knowledgeable than ever before about the value of leased equipment: Many leasing decisions, from the initial transaction pricing through the ultimate disposition of the equipment, are based on the value of the underlying asset. In addition, it’s critical to have an accurate projection of residual values.

For all of these reasons, equipment lessors need a qualified equipment appraiser to guide them through the maze of asset valuation. The question for equipment lessors, then, is how to select an appraiser, what to look for in the equipment appraisal contract, and what to expect in a leased equipment appraisal report. Thanks again to Bob Podwalny for the generous contribution of his knowledge and  experience in this area.  Read more... (632 words, 1 image, estimated 2:32 mins reading time)

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Appraisers for Leased Equipment Valuations: Part 1 of 2

April 3, 2013

valuing leased equipmentOver the years, I’ve done a number of valuations on leased equipment for various reasons. It’s almost aways the case that the folks who are leasing the equipment and the folks who own it don’t agree on what the value of the equipment is or even what the premise of value should be for the equipment being appraised. Most equipment appraisers would probably agree that valuing leased equipment is more straightforward if the contract specifies a premise of value, but we know we can’t count on that. What we can count on is that equipment lessors will continue to need their equipment appraised. This post is really for them. And I want to thank Bob Podwalny, again, for the generous contribution of his knowledge and  experience in this area.  Read more... (1161 words, 1 image, estimated 4:39 mins reading time)

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CARB Tractor Rule: Rumors & Reality

March 19, 2013

John Deere tractor photo by Jack Young, ASA, CPA, NorCal ValuationAs a machinery and equipment appraiser working in the Central Valley of California, I appraise a fair amount of mobile diesel-powered agricultural field equipment: tractors, of course, but also harvesters, sprayers, shakers, sweepers, and on and on. As anyone with an interest in diesel equipment knows, over the last several years the California Air Resources Board (CARB) has been developing and phasing-in regulation that will (or might) alter the way that all businesses (including farmers) use certain diesel engines.  Read more... (1024 words, 1 image, estimated 4:06 mins reading time)

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Appraisal Review & Dodd-Frank

February 26, 2013

Congress regulation of appraisal industryIn this guest blog, Robert Podwalny, FASA, gives an overview of the Appraisal Review and Management (ARM) field of the appraisal profession, explaining why appraisal review is needed, what an appraisal review involves, who is qualified to review appraisals, and the opportunities available in this quickly-growing area of the appraisal profession.

Substandard Appraisals

One of the largest group of valuation users — the financial community — generally does not understand the valuation process and only looks at a valuation to see if the dollar amount is above or below the outstanding balance for loans, leases or mortgages. Over time, this on-going and customary acceptance of substandard appraisals has been surprisingly workable, but in several historic instances, the federal government has had to step in with bail-out programs to save the financial community from the results of habitually accepting these inappropriate appraisals.  Read more... (835 words, 1 image, estimated 3:20 mins reading time)

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Paperless Equipment Appraisals

February 12, 2013

One of our new year’s resolution at NorCal Valuation is to be even more paperless in 2013. We took a big step in saving paper last year when we stopped mailing printed equipment appraisal reports. We now send electronic reports to all of our clients, whether attorneys, lending institutions, corporations, CPAs, or small businesses. Not only does this save paper, it also saves time and allows our clients and end-users to share the reports more efficiently if needed.  Read more... (727 words, estimated 2:54 mins reading time)

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Appraising Propane Equipment: Customer & Storage Tanks

January 8, 2013

propane equipment appraisalsWhether retail propane companies need an equipment appraised for collateral lending situations, buy-sell agreements, family law, estate tax or any other reason, the equipment appraiser  needs to take a good look at not only the basic equipment of the retail propane industry — trucks and trailers, customer tanks, and large volume storage tanks — but also the industry itself. In the last two posts, we covered recent changes in the  retail propane industry and considered the influence of those changes on the value of delivery trucks and tanks. In this last post, we’ll finish up with a discussion about the other tanks in the retail propane delivery industry: customer propane tanks and the large, on-site propane storage tanks.  Read more... (1024 words, 1 image, estimated 4:06 mins reading time)

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Appraising Propane Equipment: Delivery Trucks

December 18, 2012

Earlier, we reviewed current conditions in the retail propane industry, a commodity-based industry in a mature market place suffering from reduced sales and relatively flat projected growth. With a general understanding of the industry situation, the retail propane equipment appraiser can more easily address the interesting challenges in valuing the 3 standard equipment categories of a typical retail propane company:

  • Delivery, transport and service trucks and trailers
  • Customer tanks
  • Large volume storage tanks

Each of these categories presents its own particular challenges in valuation, from the varieties of obsolescence to the consideration of absorption, or blockage. In this post, we’ll focus on the delivery trucks, saving the propane tank valuation considerations for another day.  Read more... (981 words, estimated 3:55 mins reading time)

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Appraising Propane Equipment: Industry Overview

December 4, 2012

Retail propane companies may need their equipment appraised for collateral lending situations, buy-sell agreements, family law, estate tax or several other situations. Whatever the reason, when appraising retail propane equipment, it’s important for an equipment appraiser to understand the overall retail propane industry as well as how the basic equipment — trucks and trailers, customer tanks, and large volume storage tanks — fits into the big picture. Over the next few posts, we’ll talk about recent changes in the retail propane industry and how those changes are influencing the value of basic propane delivery equipment. Let’s start with an industry overview.  Read more... (816 words, estimated 3:16 mins reading time)

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Valuing Equipment Installation

October 16, 2012

Installation costs are one of the variables in equipment appraisal. There are two different reasons why many equipment appraisals wouldn’t include installation values. The most obvious reason is that a great variety of equipment doesn’t have any associated installation costs.  Installation costs include freight, delivery, engineering, foundations, wiring and exhaust systems, along with all other costs necessary to make equipment fully functional in place such as calibration. One obvious example of equipment with no installation costs is rolling stock — this category includes not only transportation units like trucks and commercial trailers, but also most agricultural and construction equipment, as well as landscaping equipment like edgers, mowers, shredders and blowers. That’s a pretty straightforward reason not to include installation costs in an equipment appraisal.  Read more... (443 words, estimated 1:46 mins reading time)

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CARB alert: approved emission retrofits

October 13, 2012

CARB equipment appraisalsJust received this information from CARB:

Be aware that some companies are advertising and attempting to sell devices that cannot be used to comply with Air Resources Board (ARB) diesel engine regulations. Only diesel particulate matter (PM) filters or other devices that have been verified by the ARB to meet rigorous emission reduction and durability demonstration requirements can be used to comply. Diesel PM filters that have been verified by the ARB are listed at http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm. Be sure to check that any device you are considering is on this list. You may also choose to contact an authorized installer to learn more about verified PM filter retrofit options at http://www.arb.ca.gov/msprog/decsinstall/decsinstall.htm.  Read more... (318 words, 1 image, estimated 1:16 mins reading time)

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