Valuation of machinery
The fixed assets, machinery and facilities of a company constitute in many cases a fundamental part of its production process and require significant capital investments. For all these reasons, it is very common and necessary to know the value of said assets to carry out an adequate balance or to make decisions regarding:
- Insurable capital in the subscription or renewal of insurance policies. insurance.
- Linked asset purchase and sale operations that require value justification.
- Movement guarantee or guarantee operations.
- Regulation of company assets< /li>
- Inventories or accounting reconciliations
- Price paid allocation (PPA) in single price transactions that require individualized book value allocation.
The valuation This type of asset includes machinery, facilities, equipment, tools, furniture or vehicles, and must consider such important aspects as the versatility of the asset or its specific use in a specific production process, as well as the consideration of a hypothesis of use. continued or liquidation.
Valuation of machinery using the cost method
The valuation process used to determine the orderly liquidation value is based on the cost method.
The replacement cost is the cost of replacing a machine with a new, modern machine using the latest technology and materials, which reproduces the capacity and utility of the existing machine.
Based on this valuation method, we estimate the replacement cost of the assets under consideration. This includes an assessment of the modifications necessary for them to fulfil their function, although this method is not always practicable.
The estimated value is the difference between the current price of the machine and the cost of the retrofit.
To use this method, a regularly updated machinery database is available and consulted on a case-by-case basis.
Valuation of machinery using the depreciation method
This valuation method is based on the depreciation of an asset due to wear and tear caused by use and the lack of competitiveness experienced when another similar asset with more functions and/or more capacity is put on the market.
Physical depreciation is the loss in value caused by the physical deterioration resulting from the wear and tear of an asset as it undergoes a production process and is exposed to external elements.
Depreciation over time is the loss in value of an asset due to the passage of time and increasing obsolescence.
To apply this method, a depreciation percentage for use is applied to the purchase price at the time, which is determined by the valuer according to the condition of the asset to be valued and its good working order within a range of 0 to 70, where 0 is perfect maintenance and working order and 70 is not in working order.
The other depreciation percentage is applied over time, depending on market trends and changes in the functions of the asset being valued, and varies from 0 to 30.
If the sum of the above is greater than 100%, the value it may have as scrap by weight is taken, in which case its weight is calculated at the scrap price and the depreciation percentage is not applied.
