Renting Heavy Construction Equipment

Benefits Of Construction Equipment Appraisal

The construction boom has increased the demand for heavy construction equipment. Increasingly, construction firms find themselves buying and selling heavy machinery. Such transactions create the need for construction equipment valuations. Ideally, a construction equipment appraisal is an unbiased opinion provided by a qualified and accredited appraiser on the value of heavy machinery. The following highlights the importance of construction equipment appraisal.

Financial Planning

Construction equipment appraisals help in corporate financial planning. An ideal organization requires factual information to make critical financial decisions. A construction equipment appraisal can help an organization planning to purchase such assets to budget accordingly. Requesting for an independent machinery valuation helps to analyze the prices before a purchase transaction. More so, the valuation can support a company wishing to dispose of old machinery through sales to develop a price list. 

Financial Reporting 

Financial reporting is part of the transparency and accountability measures in an organization. Part of the financial accountability requires the corporate executive team to prepare, present, and publish asset valuation. Thus, it is possible to capture the value of corporate machinery through a construction equipment appraisal. Internally, the information appears in quarterly and annual statements as part of asset and depreciation value. External financial reporting includes tax compliance. In such cases, machinery sales are recorded as an income, while a purchase is a deductible tax expenditure. 

Loans and Financing

A construction equipment appraisal may facilitate credit borrowing decisions. Typically, an organization may use heavy machinery as collateral for credit programs. In such cases, the lender may request an accredited valuation of the collateral equipment. More so, the appraisal may assist in asset financing. In such scenarios, the lender may provide credit in the machinery or the capital to purchase the equipment. In both cases, an equipment appraisal will determine how much the borrower owes the lender. 

Mergers and Acquisition 

Mergers occur when two or more firms in the same line of a business integrate into one business entity. In comparison, an acquisition occurs when a company purchases another firm in the same or different production level. In both cases, it is essential to establish the actual value of the businesses. Thus, a construction equipment appraisal becomes an integral part of the overall asset valuation in mergers and acquisitions. 

Insurance 

Insurance companies can also request for construction equipment appraisals. Such an assessment helps in equipment valuation to determine the premium amounts payable by policyholder. More so, the evaluation can help an insurance company adjuster or public claims adjuster to determine the accurate cost of damaged construction equipment during claims processing. 

Ultimately, construction equipment appraisal facilitates decision-making in business operations. If you require additional information, contact a company that provides heavy construction equipment appraisals.