When Will You Need an Equipment Appraisal?
Reasons for an equipment appraisal can be varied and multiple. Will the equipment appraisal be used for due diligence, a buy/sell agreement or dispute, or for an ad valorem tax appeal? Whatever the reason for an equipment appraisal, you can depend on us to provide independent and unbiased values in a comprehensive report that satisfies the purpose and scope of your specific project.
All machinery and equipment appraisal reports produced by NorCal Valuation Inc. are the work of an Accredited Senior Appraiser (ASA) in Machinery & Technical Specialties, the designation awarded by the American Society of Appraisers to educated, experienced and qualified individuals in the specialized equipment appraisal industry.
Due Diligence and Management Decisions
More and more businesses are insisting on an equipment appraisal for fair market value in continued use as part of due diligence involved in mergers or acquisitions. Such an equipment appraisal provides a detailed listing of the underlying machinery and equipment in an acquisition and their relative values.
Ad Valorem Tax Appeal for Business Property Tax
County assessment records can be inaccurate, causing over-taxation. A current equipment appraisal that reports equipment value based on objective, substantiated research including current market conditions, equipment depreciation and condition can lead to significant annual tax savings to you. Millions of dollars worth of taxes are reduced annually through the appeals process. Call us to investigate how you can join the many other commercial property owners who have substantially reduced their taxes with a professional equipment appraisal.
When a divorce includes a business, an equipment appraisal is critical for completing the process so that both parties can move on with their lives. In many cases, we’ve found that using a jointly retained, shared appraiser creates a more efficient, less stressful and less costly process of marital dissolution. Many family law attorneys agree that sharing an appraiser is a smart move. Whether or not not the jointly retained solution works for you, it’s prudent for at least one of the parties to obtain a USPAP equipment appraisal for any equipment or machinery since marital property disputes are likely to be subject to a legal review.
Estate Taxes and Step-up in Basis
In many inheritance situations, an appraisal is required and IRS standards of valuation must be met: the value of equipment and machinery in the estate must be adjusted from book value to fair market value at the time of inheritance. In order to comply with the IRS requirements, any taxable estate that includes equipment will require an equipment appraisal by a qualified appraiser. The IRS recently clarified the phrase “qualified appraisal” as meaning a USPAP-compliant appraisal; this, in combination with the recent IRS crack-down on abusive estate appraisals, has emphasized the need for estates to use accredited appraisers.
Be it fire loss, theft or some other type of loss, insurance companies are often involved. Parties to the claim often need a professional research independent valuation before the claims process can proceed. We also work as an independent referee to review appraisals from both the insured and the insurer to determine the appropriate value of the loss.
Fair Value & Goodwill Impairment
The Financial Accounting Standards Board (FASB) has issued a number of financial accounting standards that prescribe how assets are valued when a company is acquired. As a CPA, Jack Young has specialized knowledge into what exactly is required by the auditing forms; when it comes time for the auditors to review the appraisal, he can speak their language.
Other Reasons for an Equipment Appraisal Include
- Eminent domain
- 1031 exchanges
- Loss claims litigation
- Estate settlements
- Partnership dissolution
- Foreclosures / bankruptcy / restructuring
- Estate planning
- “C” Corp. to “S” Corp. conversion
Although we work with auctioneers and equipment dealers for market research and trends, we are not an auction firm, equipment dealers or jobbers. We never take a financial interest in anything that we appraise.