How businesses use these services
In Melbourne, plant and equipment (P&E) valuations are an indispensable tool utilised by businesses to assess the worth of their tangible assets, such as machinery, vehicles, and technology. Plant and equipment valuers in Victoria have the specialised knowledge and training needed to calculate the market value of all assets that contribute to a business's operational efficiency and productivity.
One of the key uses of this service is financial reporting and compliance.
Our Certified Practising Valuers (CPVs) provide transparent and reliable financial statements to stakeholders, regulators and potential investors.
P&E valuations focus on reviewing the condition, functionality and market value of the assets. This assists businesses in making informed decisions when negotiating purchase or sale prices, determining loan collateral or assessing the feasibility of a potential investment.
Other vital attributes of the assets include technological advancement, maximum potential life span, maintenance history and highest or best use.
This information be used for determining insurance coverage, maximising tax planning strategies, claiming compensation and more.
These valuations are most commonly used by companies in:
- agriculture
- manufacturing
- construction
- mining
Depending on the industry, licensed P&E valuers will need to ensure compliance with numerous official standards, regulations and guidelines. Current compliance of plant and equipment assets is also a core focus throughout the valuation process.
Forms of P&E valuation
Any valid plant and machinery valuation service is conducted by a trained valuer. They should be graduate members of the Australian Property Institute (API). This qualifies them to conduct all forms of asset accurately, machinery and plant and equipment valuation services.
These services employ a tailored approach. An experienced P&E valuation company knows that the needs of the client inform the service. For example, the content of the final report may differ depending on whether the service is for tax use, insurance, loans, settlements or developing an asset register.
In other words, every valuation report is customised to suit your company’s goals.
The most standard service available is the general asset valuation. This is crucial for businesses of all kinds and can provide vital information on your assets.
For instance, an asset valuation can pinpoint an asset’s:
- condition
- rate of depreciation
- remaining lifespan
- demand in the market.
The most specialised form of P&E valuation is the machinery valuation.
Establishing the market value of various forms of machinery across numerous sectors. To start a plant and machinery valuation service means seeking out licensed valuers with knowledge of specific sectors, general machinery and even niche or custom-made machinery.
These services are suited to clients working in construction, farming, media, food processing, infrastructure and more.
Plant, equipment and machinery valuation standards
There are several official guidelines and standards that exist to ensure the quality, accuracy, transparency and reliability of P&E reporting in Australia.
The Australian Accounting Standards, for example, is a set of standards that the likes of accountants, businesses and financial professionals must comply with. They are based on the International Financial Reporting Standards (IFRS) enforced by the International Accounting Standards Board (IASB) and were developed by the Australian Accounting Standards Board (AASB).
These include standards for:
- Fair Value Measurement
- Impairment of Assets
- Investment Property.
Another institution whose standards P&E valuers must conform to is the International Valuation Standards Council (IVSC). This independent organisation developed regulations for building trust between the valuer and the client. They are known as the International Valuation Standards (IVS).
These are specifically designed to ensure transparency and an ethical approach.
They include standards for:
- Scope of Work
- Investigations and Compliance
- Approaches and Methods.
The Royal Institution of Chartered Surveyors (RICS) has developed both global and Australian standards for those who value, construct, develop and manage property. All forms of property valuation in Australia must comply with these standards.
Finally, the valuation must comply with the standards set by the Australian Property Institute (API).
This organisation is among the leading names in the Australian real estate industry. They provide qualifications, oversight and continuous development training to valuation professionals. These include regular seminars and workshops designed to update the skills of licensed valuers.
Choosing the right P&E valuation service
No matter the size of your business, choosing the right P&E valuation service is essential for guaranteeing accurate and reliable assessments. This is true whether you are a business owner, investor or financial institution.
The first factor to consider when looking at potential services is expertise and experience. You need licensed professionals with specialised knowledge of the specific industry or sector relevant to your plant and equipment assets. The service should also be competent in valuation methodologies and have a track record of successfully valuing similar assets.
Consider the reputation and credibility of the service provider as well.
Look for testimonials, client reviews, and any industry affiliations or certifications that can vouch for their reliability and integrity. A reputable valuation service should also adhere to a range of industry standards and ethical practices that maintain quality and transparency.
You’ll also want to ensure the service has access to comprehensive and up-to-date market data. They should be familiar with the latest trends, regulations and market conditions impacting plant and equipment values. They should also leverage extensive industry databases.
Finally, the efficiency, turnaround time and cost of the service are important as well. Here you will need to factor in your budget and the purpose of the valuation before making a decision.
To avoid issues, inquire about their process, timeline and availability.
To learn more about plant and equipment valuation services, reach out to one of our valuers today.