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Why Would You Need A Certified Machinery And Equipment Appraisal?

April 24, 2013

There are at least 20 reasons lenders, CPAs, Attorneys, business owners, and others may need a certified machinery and equipment appraisal (CMEA) is required by lenders, CPAs, attorneys, business owners, and others.

Lenders are required to substantiate equipment values to satisfy the U.S. Small Business Administration and bank examiners. CPAs are required by the IRS to substantiate equipment values to satisfy the Pension Protection Act of 2006 and AICPA Standards of Valuation #1. Attorneys need to rely on a qualified and certified appraisal when representing clients in a number of situations. They all need to know: “What’s the equipment really worth?” How do you find out?

  • Do you guess?
  • Do you rely on the word of a non-certified person who may have a hidden agenda, such as an auctioneer or dealer?
  • Do you rely on the depreciation schedule or book value?

Guessing, relying on the word of a non-certified person, or relying on a depreciation schedule is inaccurate, unsubstantiated, filled with liability and risk, and these methods will not hold up to scrutiny.

Here are some reasons you may need a certified machinery and equipment appraisal:

  • Buy/Sell Agreements
  • Insurable Value
  • Financing
  • Tax Purposes
  • Insurance
  • Cost Segregation
  • Property Taxes
  • Gift Planning
  • Retirement Planning
  • Mergers and Acquisitions
  • Divorce Settlements
  • Estate Settlements
  • SBA Loans
  • Trust Agreements
  • Partnerships
  • 1031 Exchanges
  • Litigation Support
  • Sarbanes-Oxley
  • FASB 141/142
  • GASB 34

Estimating the true market value of your machinery and equipment requires the specialized skills of a certified professional who has the expertise and certification to determine its true fair market value. Whether you need to know the fair market value or other standards of value such as liquidation value, salvage value, or replacement cost, it makes sound financial sense to obtain a credible Certified Equipment Appraisal Report that holds up under scrutiny with financial institutions, government agencies, buyers, sellers, shareholders, or partners.

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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