When it comes to investing or liquidating assets, choosing the right partner for the appraisal process is key. In order to uncover the real value of assets it takes a specific methodology – a research approach based on historical data and first-hand knowledge of the market. How do experienced appraisers go about this process in order to achieve high levels of valuation accuracy? These are some of the important considerations that need to be made by appraisers in order to generate a correct valuation report.
1.Economic circumstances – Market
Some of the most important external factors that influence the value of an asset are current conditions and trends in the economy. Supply and demand and recent sales of comparable assets are conditions that appraisers research first and foremost during the valuation process. The loss in value or usefulness of an asset may be caused by determinants such as new environmental regulations. That leads us to the next factor of valuation.
2.Condition – Functionality
The depreciation of assets is carefully calculated by examining the physical deterioration of equipment. Defects, age, and functional obsolescence are recorded by the appraiser and the equipment is then compared to more efficient, less costly replacement technology. To accurately assess the condition of assets and inventories, professionals conduct site visits to physically inspect and describe the assets.
3.Features – Manufacturer and Model
Appraisers are usually familiar with the few equipment manufacturers that dominate the market. Brand loyalty is an influence in the market that should be taken in consideration during the valuation. Many buyers only focus on a few selected manufacturers and an experienced appraiser should have enough specific industry knowledge to know about the demand in the market.
4.Credibility of Seller – Owner’s Reputation
One of the most frequently asked questions of potential buyers of inspected equipment is regarding the previous owner of the asset. A reputable previous owner might ease concerns and make the purchase seem less risky, and reduce likelihood of issues arising. For appraisers this factor is quite significant. First-hand knowledge of the market and an unbiased approach yields a quality appraisal in this regard.
5.Accessibility – Inspection and Testing
In some situations, valuations are made without inspecting and testing the equipment in person, also referred to as desktop appraisals. It is an option for a valuation where the analysis happens based on the descriptive information that is provided by the client. Without the benefit of inspection and testing, the appraiser solely relies on the key aspects of the equipment that the seller communicates. It is important to note that for potential buyers, the fact that the appraiser is able to assess and test equipment in person can make a huge difference in what they’re willing to pay.
These factors among many others constitute a comprehensive valuation and should be taken into consideration. Our experts appraise and evaluate machinery, equipment, and inventories, specializing in semiconductor, R&D, test & laboratory equipment. At FabExchange, our appraisers are dedicated to create real value for our clients by providing a very customized advisory and execution. Contact us today to get timely and accurate valuation services and find out how much your surplus Fab equipment is worth.