Purpose and role of machine and equipment appraisal

1. The concept of machine and equipment appraisal
Appraisal of machines and equipment accounts for a significant proportion in the activities of pricing companies. Machine and equipment price is the most reliable monetary estimate of the value of machine and equipment ownership for a specific valuation purpose at the time of pricing.

Valuation of machinery and equipment is a specialized service sector that is essential to the operation of a market economy, requiring trained, knowledgeable and experienced professionals. and high professional honesty. It is the job of machinery and equipment appraisers in a market economy to provide their customers with independent, unbiased, well-researched, and logical assessments of the value of their machines and equipment. row at a specific time. Requirements for the valuer must be able to express themselves systematically, transparently, clearly, easily to understand and to have opinions. Machines and equipment must be described honestly and appraisers of machines and equipment must have certain technical knowledge. The appraiser does not need to know how to operate a particular machine, or compare the proficiency as a specialized engineer. They separate from operating the machine and the equipment, and look and see the whole thing, but when needed they also have to know how to check the application of the machine, the equipment compare against the machines, other equipment. The appraiser needs to understand the basic function of the equipment or the parts of the machine or equipment to be priced.

2. The role of machine and equipment pricing
Machine and equipment valuation is the basis and essential foundation for the effective management of assets in general and machinery and equipment in particular. Machine and equipment valuation is the basis for making decisions related to new purchase, transfer of used machinery and equipment, tax, rental, insurance, mortgage, investment and reporting. finance.

3. Purpose and value basis in pricing machine and equipment.
The pricing of machinery and equipment is made for specific purposes and the re-pricing purposes are decided on the basis of market value or non-market value and thereby help the appraiser choose the valuation method. Price matching. Therefore, appraisers need to have a firm grasp of the pricing purpose through discussing with customers about the types of machines and equipment that need to be priced, using the valuation results for what, as well as based on experience, His knowledge and qualifications and full explanation and clarity in the valuation report.

a. Machine and equipment pricing purpose.
The pricing purpose influences the choice of the pricing base. Accurate determination of the purpose of pricing helps bidders to avoid choosing the incorrect basis, thereby applying improper valuation methods resulting in improper pricing for the requested purpose. Currently, the pricing of machines and equipment often serves the following purposes:
- Buying, selling, exchanging or leasing;
- Joint venture, association, bidding, auction, investment estimation;
-  Mortgage;
-  Tax;
-  Dispute resolution;
-  Accounting;
- Other purposes.
b. Value basis in the pricing of machines and equipment.
Like general asset valuation, machine and equipment valuation has two bases of value: market value and non-market value.

Valuers and users of pricing services must clearly distinguish the difference between market prices and non-market prices to ensure objective valuation results.

c. The relationship between the purpose and the value base in pricing.
The valuation purpose will determine the choice of the value base in pricing. When pricing machines and equipment, appraisers should pay attention to:
- The valuation purpose must be clearly defined;
- The purpose and basis of the applicable valuation must be in accordance with the law;
- The valuation purpose and the selection of the value basis for the valuation must be consistent, here can prove this relationship as follows:
+ For mortgages and public purchases and exchanges: The basis of valuation is the market value.
+ For insurance: The basis of valuation is the non-market value, namely the cost of restoring the status quo or the other basis stated in the insurance contract, in accordance with the insurance regulations. 

+ For accounting and accounting: ordinary machines and equipment for production and business purposes, the valuation basis is the market value of the residual use value; for specialized machinery and equipment not commonly sold in the market, the basis of pricing is non-market value (replacement cost - accumulated depreciation) - although this is non-market value, for pricing purposes for financial reporting purposes it is considered to substitute for market value, which is accepted as market value.
+ For tax calculation purposes: The valuation base is the non-market value, specifically, the valuation base is the states regulations related to the calculation of tax on machinery and equipment.