FAQ: Equipment Appraisals

Frequently Asked Questions about Equipment & Machinery Appraisals

You can find more information about Equipment & Machinery appraisals on our blog or on other pages of this website, such as Equipment Appraisal Definitions and Reasons for an Equipment Appraisal.

What is an Appraisal?
How are Machinery and Equipment Appraisals Different from Other Appraisals?
What Kind of Appraisal Do I Need?
How Do I Choose an Appraiser?
Value vs Price: What’s the Difference?
What is USPAP?

What is an Appraisal?

An 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 (see Reasons for Appraisals).

How are Machinery and Equipment Appraisals Different from Other Appraisals?

The unique nature and portability of machinery and equipment create a need for many different valuation terms that don’t exist in other appraisal fields such as real estate or gems and jewels. Many of the items we appraise are unique plant processing installations that have no comparable sales.

Machinery and equipment appraisals also vary due to intended use of the valuation. For example, the valuation method used for forced liquidation in an insolvency scenario results in a very different value than valuation for replacement cost needed for an insurance loss claim. This also illustrates why it is critical that an equipment appraiser fully understand the intended use of your equipment appraisal.

What Kind of Equipment Appraisal Do I Need?

We provide FREE consultation of your equipment appraisal needs. By thoroughly reviewing your specific situation, we can accurately determine what type of equipment appraisal you need and what you don’t need. You will save money by getting the exact equipment appraisal your situation needs. Call 530-795-5536 or email us to get a free consultation.

How Do I Choose an Equipment Appraiser?

It is important to use an equipment appraiser who is a member of the American Society of Appraisers or another organization represented on the Appraisal Foundation Board. Be sure that your appraiser has taken a USPAP course within the last 2 years since USPAP changes frequently. Take a look at this blog post for more suggestions on choosing a competent equipment appraiser.

Value vs Price: What’s the Difference?

The job of an equipment appraisers is to arrive at an unbiased opinion of value. While value is often determined by looking at some form of price data and making adjustments, it is not accurate to assume that the selling price of an item will be the same as the value. Have you ever gotten a deal on a piece of equipment and felt that you paid less than value? Have you ever realized after a transaction that you could have gotten the same item cheaper some place else? An equipment appraisal will provide an opinion of value that in all likelihood will not match your purchase receipts.

What is USPAP?

USPAP (Uniform Standards of Professional Appraisal Practice) is published and maintained by the Appraisal Standards Board (ASB) of the Appraisal Foundation, a non-governmental entity charged by Congress to set all appraisal standards. USPAP identifies a minimum set of standards that apply in all appraisal, appraisal reviews, and appraisal consulting assignments. USPAP has been specified by the IRS as a crucial qualification for many types of appraisal reports, including equipment appraisals for tax-related reasons.

Have More Questions about Equipment Appraisals? Call us at 530-795-5536.

We’re happy to answer any questions you may have regarding your equipment appraisal situation.