Asset Valuation Process - Definition of Terminology

At Rabin, our professional machinery and equipment appraisal team has worked together for over 25 years and have extensive experience in nearly every facet of industrial equipment.  Their collective expertise has allowed them to complete hundreds of reports over the years that provide our clients with real-world obtainable value conclusions.  The following is our final blog discussing terminology used in the asset valuation process. 

Our definitions are from the American Society of Appraisers who define the following as a starting point based on standard appraisal theory.  ASA’s states the definitions may be expanded or refined as the purpose and function of an appraisal dictate, as long as the fundamental concepts are not altered. (Other than laws by a country, state, region, or regulatory agency that may take precedent)  

·         Salvage Value - An opinion of the amount, expressed in terms of money that may be expected for the whole property or a component of the whole property that is retired from service for possible use elsewhere, as of a specific date.

·         Scrap Value - An opinion of the amount, expressed in terms of money that could be realized for the property if it were sold for its material content, not for a productive use, as of a specific date.

·         Insurance Replacement Cost – An opinion of the amount of the replacement cost new as defined in the insurance policy less the replacement cost new of the items specifically excluded in the policy, if any, as of a specific date.

·         Insurance Value Depreciated – An opinion of the insurance replacement cost new less accrued depreciation considered for insurance purposes as defined in the insurance policy or other agreements, as of a specific date.

To discuss your machinery and equipment appraisal needs, please see our website for contact information.  We are more than happy to answer any questions you may have regarding your equipment appraisal situation.

In business for over 60 years, Rabin is an industrial auction and real estate investment company, with a focus on the acquisition and sale of industrial equipment and facilities around the world.  Rabin Worldwide is headquartered in San Francisco with a European subsidiary office in Manchester, United Kingdom.

Source:

Machinery & Technical Specialties Committee of the American Society of Appraisers, July 25, 2010

http://www.appraisers.org/Disciplines/Machinery-Technical-Specialties/mts-appraiser-resources/DefinitionsOfValue