Every day you are in contact with business owners that need a true and accurate fair market value for their capital equipment. How do you determine a value? What value definition is appropriate for your client’s needs and situation?
- Rely on book value?
- Rely on the owner’s word?
- Rely on some non-certified person’s word?
If you rely on guessing, book value, the owner’s word or the word of a non-certified person who may have a “hidden” agenda, what are the Risks?
Stop for a minute and think about the liability and risk you and your client are taking if you rely on anything other than a Certified Machinery & Equipment Appraisal!
The #1 Secret is what so many of your colleagues have proven and relied upon …you can reduce the risk of liability when you rely upon a “qualified” USPAP compliant appraisal by a “qualified” appraiser. Specifically, you can rely with confidence on a Certified Machinery & Equipment Appraisal prepared by a Certified Machinery & Equipment Appraiser (CMEA).
A CMEA is experienced in collecting, substantiating, reporting and determining a value that is consistent with USPAP (Uniform Standards of Professional Appraisal Practice). A Summary Machinery & Equipment Appraisal prepared by a CMEA will withstand the scrutiny of the IRS, courts, lenders and others.
15 Reasons Why Accounting Professionals Need A Certified Machinery & Equipment Appraisal To Eliminate The Risk Of Liability And Possibly Alleviate Penalties
- Converting From C To S Corp – A CPA typically requires an appraisal of the assets.
- 1031 Exchanges – One of the best kept secrets of the IRS. Assets require a valuation for a like-kind exchange.
- ESOPS – Initial appraisals must start out with accurate values of tangible assets such as machinery/equipment. Book value is usually not accurate.
- Valuations – Book value is probably not accurate and usually different from Fair Market Value. If the machinery/equipment is not valued properly, the entire business valuation is skewed. Lots of risk and liability!
- Gifting – Requires an appraisal of the items becoming a gift.
- Estate Planning – Trusts and Wills require a value of the items.
- Liquidations – How do you effectively and profitably liquidate the assets?
- Sarbanes-Oxley – Tangible assets must be valued and substantiated.
- Buy/Sell Agreements – Partners need to know at the outset how machinery and equipment values will be determined.
- Financing – Establishes collateral value. The lender will need to have a Certified Machinery and Equipment Appraisal.
- Cost Segregation – Equipment values need to be substantiated.
- Divorces – The division of property will require an accurate, substantiated value by the court.
- Property Taxes – An excellent tool to prepare for a governmental authority to reduce and substantiate equipment values or substantiate the equipment is no longer owned by your client.
- Partnership Dissolution – The partners are splitting the sheets and a total equipment value will be required.