When you need one
- Term loans — fresh sanction, takeover, enhancement and renewal
- NPA, recovery and settlement — what the plant would realise
- Insurance — reinstatement value for the cover, and support for claims
- Mergers, demergers, asset sales and audits — fixed-asset verification with values
- Proposed units — quotations and invoices vetted before the bank finances them
What is checked on the floor
- Every machine traced to the asset register — make, model, serial number, year, capacity and location
- Working condition, maintenance and running hours, with photographs of the nameplates
- Machines not found, not installed or not in use recorded as such — never quietly valued
- Utilities and auxiliaries — compressors, boilers, transformers, cranes, pipelines — listed with the plant they serve
How the value is built
Most installed machinery has no ready market price, so the core method is cost-based: the current cost of an equivalent new machine, less depreciation for age, condition and any technological obsolescence — the depreciated replacement cost. Where an active second-hand market exists, as for CNC machines and standard equipment, market evidence tests or replaces the cost figure.
| Value | The question it answers |
|---|---|
| Fair value | What the installed plant is worth to a business that keeps using it |
| Realisable value | What the machines would fetch in an orderly sale, after removal costs |
| Distress value | What a quick, forced sale would bring — the figure lenders hold in reserve |
| Reinstatement value | The cost of replacing the plant with new of the same kind and capacity, for insurance |
Imported machines
Imported lines are valued from the bill of entry — the declared value, customs duty, freight and installation — and from today's landed cost of an equivalent machine at the current exchange rate. Manufacturers and dealers are contacted where the model has changed. An imported machine is never written off as "nil" because its invoice is old or in a foreign currency.
Invoices and quotations for new units
Before a bank finances a new unit, the quotations and invoices are vetted: the supplier's identity and GST registration, prices against market quotations, imported and indigenous components separated, and installation certificates checked against what is actually on the floor.
Documents to send
- The fixed-asset register
- Purchase invoices and, for imports, the bills of entry
- Installation or commissioning certificates
- The insurance policy and the plant layout
- Earlier valuation reports, if any — listed in the report and not relied upon
The firm's IBBI registration is for land and building. Where an insolvency assignment needs an IBBI-registered valuer of plant and machinery, the firm works alongside one.