Financially speaking, when we talk about assets, we mean economic resources. In other words, anything your company has that is capable of being controlled or owned in order to produce positive economic values is deemed to be an asset.

A business’s plant and machinery are a considerable asset, often making up a staggering 80% of the total assets of the company. By plant and machinery, we mean anything the company uses in an industrial sense to produce goods or services, be it in the mining, food processing, manufacturing, hospitality or construction industries.

The accurate, professional and independent valuation of a company’s plant and machinery is one of the most important and, quite often, the only way to determine the real value of its fixed assets. It is crucial to its annual financial reporting, as the valuation will determine the economic worthiness of the plant as part of an ongoing business concern.

It is also important for sales, insurance, auction, a takeover or if the company needs to secure loan facilities. In this last instance, a machinery valuation determines the collateral value, which in turn helps to justify the loan amount requested.

In the case of a company being available for purchase, it’s helpful to know how much the machinery and equipment are worth, as this determines what percentage of the overall purchase price is goodwill. Obviously, if equipment is being sold individually, and not as part of a “turnkey” operation, their value will be less.

Valuing assets such a plant and machinery is different from valuing other types of assets – such as real estate and intangibles – because the values can differ depending upon specific circumstances. These could include going concern value, liquidation value, and installation costs, among others. This is why it’s so important to ensure your plant and machinery valuation is carried out by an experienced and qualified professional valuations company.

The Property Partnership East Rand is exactly that, and we have vast experience in plant and machinery valuations. Call us today on 0860 999 440.