Depending upon the situation surrounding the need for the appraisal. The value concept researched and estimated may be one of the following.

• Fair Market Value
• Fair Market Value-Installed
• Fair Market Value-Removal
• Fair Market Value in Continued Use
• Orderly Liquidation Value
• Forced Liquidation Value
• Replacement Cost New
• Reproduction Cost
• Salvage Value
• Scrap Value

In the appraisal of machinery, equipment and personal property there are three (3) general approaches to value (Market Approach, Cost Approach & Income Approach). Two (2) of which are most widely utilized (the market & cost approaches), with the third (income approach) being used in special circumstances.

The most widely used and accepted approach is the Market Approach (also referred to as the sales comparison approach). This approach considers prices recently paid for similar items with adjustments made to indicated market prices to reflect the conditions of the sales, financing & sales concessions, physical condition and utility of the comparable sales in contrast to the subject property items. This approach is appropriately employed when valuing assets which are commonly bought and sold in arm's length transactions.

The second most widely accepted approach is the Cost Approach. This approach is utilized when valuing assets not commonly traded. In such situations, the Cost Approach is generally the only reliable approach to value. Under this approach, the cost to reproduce or replace the asset in question is considered. From this amount, an allowance is deducted for the total loss in value, as of the effective date of valuation, due to any depreciation or obsolescence present, whether arising from physical, functional or economic causes.

The least utilized approach to value for machinery, equipment and personal property appraisals is the Income Approach. This approach is applicable when an income & expense stream can be identified (and isolated) for the subject asset or grouping of assets. This approach considers the value of an asset or grouping of assets in relation to the present value of the future economic benefits derived from ownership. This is normally measured by capitalizing the future benefits into an indication of value.

Depending upon the situation surrounding a valuation and the data available. We will help you weed through this methodology to a clear understanding of the value to be estimated and the approaches to be applied.

The types of data we utilize in the performance of machinery, equipment and personal property appraisals vary widely depending upon the appraisal problem. These sources may include.

• Prices recently paid for similar items.
• Current listing prices for similar items.
• Recent auction results.
• Published price guides.
• Catalog prices.
• Dealer quotes.

We subscribe to a number of print media and on-line data bases for used pricing of machinery, equipment and personal property. These sources provide; detailed auction results & prices, detailed listing prices, detailed dealer prices and detailed rentals rates. This data is supplemented by a constantly updated data base of catalogs for replacement cost new data from various sourses. We are constantly developing measures for depreciation from the collected data.

This all goes together to form a solid basket of market information to form the basis of estimated values. Each of our written reports will list the specific references for the engagement that were replied upon for pricing information.

There are two (2) basic types of appraisals performed, either a limited appraisal (also referred to as a desktop opinion) and a complete appraisal.

A limited appraisal normally does not rely upon a physical inspection of the subject assets by the appraiser. The appraiser relies upon listing and illustrative information supplied by the client to identify the assets and proceed with the valuation. The appraiser must disclose in the report the steps taken, or not taken, in the limited appriasal. In addition, the appraiser may also limit the approaches & techniques utilized in the valuation (for example - only price guide information). This is the least expensive type of personal property appraisal, but the least reliable.