Skip to content

The Importance of Appraisal in Machinery and Equipment Depreciation

February 15, 2012

When it comes to machinery and equipment, depreciation is the estimated decrease in value from the initial purchase price of an asset based on a number of criteria, including physical, functional, and/or economic factors.

From an appraisal perspective, which is somewhat different than an accounting or finance perspective, if machinery or equipment is still functional, being used, or if there is an active market for similar types of equipment, it still has value. For an asset that is 20 years old, if the owner of the asset were to sell the asset, it would be worth more than $0, which is what it would be valued at from an accounting perspective.

Determining the value of machinery and equipment can sometimes be confusing and tricky so it’s always best to speak to a professional certified machinery and equipment appraiser (CMEA) if you have questions about the depreciation of your machinery and equipment, especially if you are looking to sell.

The NEBB Institute endorses and strives to observe the highest standards of professional ethics to preserve the public trust inherent in the professional appraisal practice. The Institute provides initial and monthly comprehensive education, ongoing support, and a dynamic international network, and certifies professionals in the art of machinery/equipment appraisal and brokerage.

By: NEBB Institute

Comments are closed.

%d bloggers like this: