Most of the time, appraising equipment and machinery is fairly straightforward. But once in a while, especially for farm and manufacturing equipment, we get something so out-of-the-ordinary a different kind of research is necesary. That's not usually the case. Usually, when a USPAP appraisal is needed for a farm, factory, restaurant, ranch, fitness center or production shop, the gear and machinery is merely what it looks. The inventory lists of Subject Assets I see usually include such basic items as a John Deere 6715 MFWD, a Leroi Diesel 185 towable compressor, or a Bridgeport mill. So generally, just by looking at the inventory, an equipment appraiser could have a pretty good idea of what's being appraised. The final opinion of value, of course, will take into account depreciation factors representing the condition, functionality and operability of said tractor, compressor, or drill, initially derived from this or observed health of the assets and then adjusted, using the Subject Asset's current health taking into consideration the extent and regularity of maintenance, overhauls, and rebuilds. And, of course, the premise of value, or level of trade, will inform the final valuation in virtually any USPAP summary appraisal report. Most equipment and machinery appraisers, however, would agree that--given the necessary information, even including the research and adjustments necessary for such standard equipment--providing an impression of value for, say, a 2007, well-maintained John Deere 6715 MFWD with 843 engine hours and a Raven System isn't particularly challenging. What is challenging, and one of the aspects of appraising I enjoy the most, is coming across a one-of-a-kind, custom-designed & -built, just-for-our-shop/farm/assembly line creations. In a situation like this, an equipment appraiser can't use the tried-and-true method of Market, or Sales Comparison, Approach. A distinctive piece of custom equipment can't be valued by researching sales of other similar equipment-because there is no similar equipment. Since we can't, in the case of unique equipment, depend on Sales Comparisons to inform an equipment appraisal, we move on to Cost Approach. And that's where in fact the fun starts. Cost Approach estimates value based on the cost to reproduce or replace an asset with another of like utility. Replacement costs are usually obtained from manufacturers, vendors and published price lists. Regarding custom farm and manufacturing equipment, we can disregard the vendors and published price lists-these items are not bought and sold in the general public market. They are designed and built for just one specific and specialized use, usually for one particular interest or business. What Click here for info can indicate is that the gear appraiser will speak to the folks who built the specialty equipment. Often that's someone who's hands-on in the business-the farmer who owns the almond orchard, the rice farm, or the fruit and vegetable farming and distributing company; an owner-engineer who determined a more effective solution to cut or polish a lens, dredge a river for gold, or twist a sheet of metal; and sometimes a rep from the manufacturing business that truly made the unique machine or device. Two important steps follow these interviews: First, indexes from the Bureau of Labor Statistics are accustomed to track the initial cost around Replacement Cost New and then an age/life analysis determines the existing value remaining, a critical value within an appraisal. Most qualified, certified, accredited equipment appraisers come in the business enterprise in large part since they like machinery. So speaking with the people who've created these specialty equipment items for their particular needs, whether for manufacturing, farming, ranching or production, really makes us happy. We are able to hear from the enthusiasm and interest in their voices they care about equipment, that they are thinking about how machinery benefits their own work, and they are very happy to share the information they have with someone who also cares. Sometimes talking with folks is among the most best part to be an equipment appraiser. I've consulted and interviewed with manufacturer reps, sales people, business owners, mechanics, auctioneers and appraisers across the nation and in my own neighborhood. It is a continuing delight to report that men and women are almost universally generous with their time and information.
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