Analyzing Complex Appraisals for Business Professionals

Chapter 9

Analyzing the Machinery and Equipment Appraisal

Generally only two approaches are used to value machinery and equipment: the cost approach and the sales comparison approach. The income approach might be used to value a machine based on its production and efficiency, but it is so rarely used that this book will concentrate only on the first two approaches. But before they are examined, the reviewer needs to gain an understanding of the information the appraiser should have to utilize the approaches.

The Asset List

When appraisers begin a machinery and equipment assignment, the asset list is normally their starting point. Companies maintain asset lists for a variety of reasons, including inventory records, property tax records, and income ...