Machinery and equipment are essential assets for many businesses. They can be expensive to purchase and maintain, so it is vital to have an accurate understanding of their value. This assessment is where machinery and equipment appraisals come in. As an ASA-certified appraiser, we discuss the importance of documentation for machinery and equipment appraisals and provide tips for keeping good documentation.
What Documentation is Needed?
An appraisal is a professional opinion of the value of an asset. In the case of machinery and equipment, the appraiser will consider factors such as age, condition, location, and market demand to arrive at a value.
The documentation you provide to the appraiser will be essential to the accuracy of the appraisal. This documentation should include:
- The purchase price of the equipment
- Any maintenance or repair records
- Photos of the equipment
- Information about the equipment’s condition
- The serial numbers of the equipment
The more complete and accurate the documentation you provide, the more precise the appraisal will be.
Why Documentation is Important
It is essential to have accurate documentation for machinery and equipment appraisals for several reasons.
- To make informed business decisions. An accurate appraisal can help you make informed decisions about your equipment, such as selling, trading, or upgrading.
- To comply with financial regulations. Some financial regulations require businesses to have accurate valuations of their assets. For example, the Sarbanes-Oxley Act requires publicly traded companies to have their assets appraised annually.
- To resolve disputes. If there is a dispute over the value of machinery or equipment, an appraisal can provide objective evidence to help resolve the dispute.
- To file insurance claims. An appraisal can help you file an accurate insurance claim if your equipment is damaged or destroyed.
Keeping good documentation of your machinery and equipment ensures you have the information you need to get accurate appraisals. Accurate documentation will help you make informed business decisions, comply with financial regulations, resolve disputes, and file insurance claims.
Tips for Keeping Good Documentation
Here are some additional tips for keeping good documentation of your machinery and equipment:
- Create a file for each piece of equipment and keep all relevant documentation, such as purchase receipts, maintenance records, and photos.
- Update the file regularly with new information, such as any repairs or upgrades you make to the equipment.
- Label the file clearly and store it in a safe place.
We hope you understand the importance of documentation for machinery and equipment appraisals. Following these tips ensures you have the documentation for accurate machinery and equipment appraisals. Correct records will help you protect your assets and make informed business decisions.
When you’re ready to choose a machinery appraiser for your business, contact ICS Asset Management Services. We are the expert in providing quality, certified equipment and machinery appraisals and inspections. For a personal consultation for your specific appraisal needs, contact us at 800-536-7376 or online. We’ll help you maximize the value of your machinery and equipment assets.