Appraisal of machinery What should you know?

Appraisal of machinery: What should you know?

Today, we are going to talk about the appraisal of machinery, and small details that you should know. When should I do the appraisal of a machine? How is a machine valued? Who must sign the appraisal report? We tell you the most important details of the machine appraisal!

Appraisal of machinery for justification of subsidies

One of the most common purposes when it comes to needing the appraisal of a machine, is the justification of any type of subsidy before the Administration. This happens because the companies that receive a subsidy do not present three formal budgets that determine a market value of the machine, so the Administration demands an official appraisal report from a competent technician. In addition, normally, it is requested that said machinery appraisal report be endorsed by the college of industrial engineers, to give greater validity to said appraisal report.

But, what other purposes are frequent when making the appraisal of the machinery of a company?

In addition to justifying subsidies, machine valuations are often used in asset valuations, when determining the asset value of any company and in private valuations for the sale of said machine. Do you need a machine valuation to update your business asset?

We can simplify by commenting that machinery appraisals are valid to demonstrate solvency for a loan, to contribute as an asset to companies or to defer payments to the Treasury.

How is the appraisal of a machine carried out?

There are different methods when it comes to appraising industrial machinery, in compliance with current regulations. These methods are taken according to the real conditions faced and we all know that every company cannot be the same. They have their own problems. We detail some aspects of each of the methods to be used.

Cost or replacement method

Replacement is understood as the cost of replacing any machinery with a new machine, respecting the utility of the current machine, therefore, the cost or replacement method tries to analyze the value of the new machinery, the official appraisal of the machinery being the difference between the current price and the costs of replacing said machine with a new one.

Depreciation method

The depreciation method reflects the wear and tear that occurs on any machine or appliance over time and its use. In this method, the depreciation suffered by a machine due to its use and the depreciation suffered by the passage of time must be analyzed.

Who performs the appraisal of industrial machinery?

In this section, we must differentiate several technicians based on the machinery to be assessed. We can speak of technicians in content validation or industrial engineers. In the case that concerns us in this post, we are talking about industrial machinery, therefore, the appraisal reports must be made by an industrial engineer, duly registered and endorsed by said college. This action should be taken by those who are really experienced and professional. Hope this article helped you understand some important things related to the appraisal of machinery.

John Norwood
John Norwood is best known as a technology journalist, currently at Ziddu where he focuses on tech startups, companies, and products.