COSTS SERVICE VALUATION OF MACHINE AND EQUIPMENT

Machinery and equipment are understood as a complete structure including details or clusters of parts and many parts linked together to operate and move according to the designed purpose of use. Along with the continuous development of science and technology, many types of machines and complex equipment have appeared that can be operated and used when attached to factories or some other construction projects.

Today, Vietnam is in a period of industrialization and modernization. Machines and equipment are increasingly improving in terms of performance as well as compact and convenient design and appearance. requires machine users to have high professional qualifications. Lets learn about equipment valuation procedures and costs for the above equipment.

Method

Machinery and equipment are often appraised through the cost approach.

The cost approach is a way to determine the value of the appraised asset through the cost of creating an asset with identical or similar functions and uses to the asset being valued and depreciation of the asset. appraisal products.

Method content

The cost approach can be used to determine the value of assets appraised on a market or non-market basis.

Applicable in case:

+ There is not enough information in the market to apply the market approach and income approach.

+ There is an intention to create a new asset or when appraising the price of a newly built project or newly manufactured asset.

+ Check the results of other valuation approaches.

Renewable cost method – cost of equipment valuation

The reconstruction cost method is based on the cost of creating an asset that is identical to the appraised asset. This asset includes outdated and outdated features of the appraised asset.

Recipe:

Estimated value of the asset = Regeneration cost (inclusive of Manufacturer/Investors Profit) – Total Depreciation Value (Accumulated Depreciation Value)

Replacement cost method – cost of equipment appraisal

The replacement cost method is based on the cost to create a replacement asset, similar to the asset being valued in function and use, but designed, manufactured or built with technology and materials. and newer techniques. Typically, replacement assets often have lower production costs than renewable costs, and operating costs are not higher than prevailing levels at the time of valuation. Therefore, the total depreciation or accumulated depreciation of the replacement asset usually does not include functional wear due to high capital costs or functional wear due to high operating costs.

Recipe:

Estimated value of asset = Replacement cost (including manufacturer/investors profit) – Total depreciation value (Accumulated depreciation value does not include functional depreciation value of the appraised asset is already reflected in the cost of creating the replacement asset).

Principles for best and most effective use of equipment valuation costs

The best and most effective use of assets is to achieve maximum usefulness under appropriate, realistic socio-economic circumstances that are technically, legally, and financially permissible. and bring the greatest value to the asset.

However, an asset in actual use does not necessarily represent its best and most effective use.

Principle of supply and demand

The value of an asset is determined by the relationship between supply and demand for that asset in the market. Conversely, the value of that asset also affects the supply and demand for assets. The value of assets changes in direct proportion to demand and inversely proportional to supply of assets.

The value of an asset is determined by the relationship between supply and demand, including factors such as physical characteristics and socio-economic characteristics that are different from the attributes of other assets. The influence of these additional characteristics is reflected in supply and demand and asset values.

Competition principles

Excessively high profits will promote competition, conversely, excessive competition can reduce profits and may eventually become unprofitable. For assets, competitive relationships are also observed between assets and between one asset and another. Therefore, the value of assets is formed as a result of competition in the market.

Contribution principles

The degree to which each part of the property contributes to the total income from the entire property has an impact on the total value of that property.

The value of a productive agent or a component of an asset depends on how much its absence reduces the value of the entire asset, that is, the amount of value it contributes to. What is the total value?

This principle is the basic principle in considering the feasibility of additional investments in assets when the appraiser determines the best and most effective use of the asset.

Subjects participating in machinery and equipment price appraisal

According to the form of business

– Private enterprise

– Co., Ltd

– Joint stock company

– State enterprises

According to business sector

– Enterprises directly producing

– Businesses providing services in the fields of finance, banking, commerce, consulting, construction design, technology fields...

Purpose of appraisal of machinery and equipment prices

– New purchases, liquidation

– Equitization

– Buying and selling businesses, contributing capital, joint ventures, and partnerships

– Converting business form, establishing/dissolving businesses, investing

– Listed on the stock exchange

– Issuing shares, offering shares to the market

– Buy, sell, merge businesses

– Mortgage and bank loan guarantee

– Prove financial capacity….

To know the exact value of the property, you should look for appraisal units that have a lot of experience and expertise to accurately assess the market and price, so they will make accurate and quick judgments. best.

One of the leading reputable appraisal units in Vietnam is SunValue. With more than 20 years of establishment and development, SunValue is proud to become one of the leading real estate appraisal units in Vietnam, leading brand in Vietnam 2023, strong brand in Asia 2021, with a system of nearly 50 Branches and Transaction Offices across the country. As a reputable, independent price appraisal unit, a pioneer in applying technology in price appraisal, helping to monitor real estate price fluctuations, complete price data to support the development of Vietnams real estate market and International.

With a fast, quality implementation process, free consulting services, appropriate appraisal costs, confidential information, along with a reliable source of price data, it will bring the best experience to customers.

Contact us now for answers to your questions and consultation on fees!

SunValue - A national brand that has actively contributed to the development of the valuation industry in Vietnam.