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Appraising Custom Machinery and Equipment

September 15, 2010

For an experienced certified machinery and equipment appraiser (CMEA), determining the value of a piece of standard farm equipment or restaurant fixtures is a relatively straightforward process. A CMEA will take into consideration various factors to determine value of a piece of equipment, such as its original price, its age, depreciation ranges, and its current market value. While it takes a certain level of expertise, clear-cut fair market value can be determined because of the data that exists regarding numerous comparable pieces that are in the marketplace.

It is much more difficult to establish values, however, for custom machinery and equipment, including dies and molds for very specific industries. This type of equipment may be one of a kind, meaning there is no comparable data, and value is much more difficult to determine. This is when experience and training really matter. A non-certified appraisal can be anything, including just a piece of paper with a company letterhead, and a list of items and prices.

When valuing custom machinery and equipment, there are many factors to consider, such as its production cost, the value of its usage, the cost of its replacement, depreciation, salvage value, and scrap value. When you need to know what it’s worth, you should always rely on the skills and expertise of a CMEA to make the right calls in order to determine the true fair market value of your custom equipment.

By: NEBB Institute

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