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Appraisal Education

There are generally two types of reports that can be performed for an equipment appraisal:

Field Appraisal:

A field appraisal report includes an on-site inspection by one of our associates and is typically utilized for estimating the value of machinery and equipment. On-site inspection details and photographs are included in the appraisal report. This report expresses value as a single figure for each tangible asset valued and the aggregate is reported as a single number.

Desktop Appraisal:

A desktop appraisal report is typically used to determine value without the expense of an on-site inspection and detailed analysis of the condition of the machinery or equipment. You send us pictures and a description of the machinery or equipment and we provide a value based on this information. This report expresses value as a single figure for each tangible asset valued and the aggregate is reported as a single number

Type of Value provided:

Definition of value:

There are a number of definitions of value regularly used by a machinery and equipment appraiser. The types of value below are the ones used most frequently. Most frequently used definitions are based on the official definitions published by the American Society of Appraisers’ Machinery and Technical Specialties committee in August 2010, except as otherwise noted.

Additional special purpose definitions are used for some accounting, insurance and condemnation appraisals, including Replacement Cost New, Reproduction Cost New, Salvage Value, Scrap Value, Actual Cash Value and a number of others. Which definitions should be used for each appraisal varies, depending on applicable laws and client needs.

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.

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.