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Appraising Machinery that Is Rare or Custom Made

April 25, 2012

When a Certified Machinery and Equipment Appraiser (CMEA) inspects a cement mixer, office equipment, or something that is ready to use out of the box, he or she uses a set of factors to determine the equipment’s worth. These factors include the original purchase price of the equipment, its depreciation, how much wear and tear the equipment has, and its current market value. The process is generally not complicated because with out-of-the-box equipment the CMEA can compare the piece that’s being appraised to other comparable pieces of equipment, which can help determine the equipment’s value.

The appraisal process gets more complicated when it comes to a piece of machinery that was custom built or extremely rare because there may be few comparables, or none at all. In this case, a CMEA has to look at other factors to determine the value of the equipment. Some of the factors include the original production cost, the value its use brings the company, what it would cost to replace the equipment, and its depreciation schedule, as well as its salvage and scrap values. Determining the value of rare or custom made equipment is a tricky process that requires an experienced professional with specialized skills. Make sure you work with a certified appraiser when determining the value of a piece of rare or custom equipment so you know the value you get is accurate.

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

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