Equipment Appraisals for Divorce Litigation Purposes
Business assets are treated much the same way as personal assets when going through a divorce. An equipment appraisal will be necessary to determine the fair market value of the equipment. When dividing assets, there needs to be a method for determining what value you are dividing with your spouse. The court accepted method is to have an appraisal of the business assets completed by a certified appraiser, which will establish what value will be used when distributing the assets. An equipment appraisal will be a means of proving the true value of the tangible assets and provide a solution to conflicts that may arise.
Years ago, a friend of mine was going through a divorce who shared a business with her husband. When she discussed the buyout value of the company, she said they relied on their CPA. One problem I pointed out was that the CPA is looking at the book value of the business assets, which is a standard depreciation schedule and not current market value. They overlook the actual market value, which typically is higher.
Parties need to be careful when choosing the appraiser for the valuation. If the appraiser is not a certified appraiser conducting the research and report under the Uniform Standards of Professional Appraisal Practice (USPAP), there may be several flaws in the court’s eyes.