Why an Appraisal?
There are no less than 20 reasons why a certified machinery & equipment appraisal 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 also required by the IRS to substantiate equipment values to satisfy the Pension Protection Act of 2006 and AICPA Standards of Valuation. Likewise, Attorneys need to rely on a qualified and certified appraisal when representing a client when equipment is to be divided or allocated.
Each of these professionals all ask the same question: “What’s the equipment really worth?”. They may even ask “Is there goodwill?” or “Do only the tangible assets of your business have value?” If so, how are those assets valued?
Which of these methods do you typically use to determine equipment value?
- Do you guess?
- Do you rely on the word of a non-certified person who may have a hidden agenda?
- Do you rely on the depreciation schedule or book value?
BEWARE! Guessing, relying on the word of a non-certified person, or relying on a depreciation schedule is inaccurate, unsubstantiated, filled with liability, risky, and will not hold up to scrutiny!
Estimating the value of your machinery and equipment at any given time requires the specialized skills of a professional who has the expertise and certification to determine its value. Whether you need to know the fair market value or other standards of value such as liquidation value, salvage value or replacement cost, doesn’t it make 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?
(Hint… You’ve probably needed a CMEA professional on more than one business occasion, but you just didn’t know a certified machinery and equipment appraisal was required until now!).
Briefly… Here are 20 typical reasons why you NEED to obtain a Certified Machinery & Equipment Appraisal by a Certified Machinery & Equipment Appraiser (CMEA)
- Business Valuations
- Financing (Lending, Leases, etc.)
- Buy/Sell Agreements
- Insurable Value
- Tax Purposes
- Cost Segregation
- Property Taxes
- Gift Planning
- Retirement Planning
- Mergers and Acquisitions
- Divorce Settlements
- Estate Settlements
- SBA Loans
- Trust Agreements
- 1031 Exchanges
- Litigation Support
- FASB 141/142
- GASB 34