CFO’s and Controllers FAQ
Here are questions CFOs and controllers typically ask when inquiring about our services:
Why would a CFO or controller require a certified machinery and equipment appraisal?
A CFO or controller would require a certified machinery and equipment appraisal for several reasons:
- Financing/SBA loans
- Business Valuations
- Converting from C-Corp to S-Corp
- Employee Stock Ownership Plans (ESOPs)
Why would a CFO or controller need to employ a CMEA?
CFOs and controllers are well versed in determining value; however, appraised machinery and equipment values are different than calculated “book values” and “net book values.” The team at CMEA specializes in assessing the “fair market” and “fair value” of your assets, the value required when reporting what your machinery and equipment is worth.
Why is fair market value used instead of book value?
Fair market value is what your asset is worth now on the current market. Book value is the difference between the acquisition cost and depreciation, which does not reflect the true value that would be obtained on the open market.
Will a CMEA prepared report stand up to IRS and court scrutiny?
Yes. A certified report prepared by our professional CMEA team is substantiated and irrefutable. It is written in compliance with the Uniform Standards of Professional Appraisals Practice (USPAP).
Is a machinery and equipment appraisal needed when a business valuation is prepared?
A professional appraisal of your machinery and equipment is necessary to ensure the business is not undervalued. Tangible assets can be a vital part of the operations and thus are considered to hold significant value. If so, physical assets may have to be segregated to ensure that the value of the business is properly valued.
What type of equipment do you appraise?
We serve a variety of industries and can accommodate most requests. Please contact us directly for further information regarding your requirements.
What information is included in a certified appraisal report?
In order to be USPAP compliant, a certified appraisal report includes specific information about the subject property. These facts will withstand scrutiny by any interested party, including the IRS, lenders, attorneys, and members of the judiciary system.
A certified report prepared by Capital Machinery and Equipment Appraisals will include the following defensible information regarding the subject of your client’s appraisal:
- Summary of facts
- Scope of work
- Degree to which the property is inspected or identified
- Extent of research into the physical or economic factors that could affect the property
- Extent of data research
- Type and extent of analysis applied in arriving at opinions or conclusions
- Depth of on-site inspection
- Overall condition of equipment
- Intended use
- Definitions of conditions
- Methods of evaluation
- Sources contacted
- Final value summary and reconciliation
- Appraiser’s certifications and qualifications