There are many theories when it comes to valuing property, plant, and equipment. The biggest issue lies with the various methods of valuation – and the reason for each of them.

What is a plant asset? In simple terms, it is an asset with a useful life of one year. It is used in business to produce revenue. This could include land, buildings, machinery and equipment, office furniture, vehicles, and even construction work in progress. Plant assets are also called fixed assets – or most often PP&E (property, plant, and equipment).

PP&E describes an account on the balance sheet. It reflects the total of a company’s property, plant, and equipment up to that point – less amortization. Amortization is used to devalue an asset as it’s used, and it measures its economic value through its life.

Historic value, book value, insurance value, and market value will all give you different figures.

So, do you need this valuation in order to sell your plant assets? Are you applying for finance to expand? Does your insurance company need an update on your assets? Is a merger on the cards? Or are you thinking of liquidating and moving to a remote island away from all the red tape?

In order to get the numbers right, a valuation company needs to find the historic value of the plant assets. This is the price paid at the start. It’s worth noting that in order to keep accurate records, it’s a good idea to get a valuation done regularly. For example, a piece of land bought back in 1960 is worth a great deal more now – and will definitely affect your company figures.

An insurance valuation will be based upon the cash – or replacement – value at the time the policy was issued. But, when dealing with PP&E, some problems arise. For instance, building costs are soaring. So replacing a piece of building machinery would include a higher cost. Not forgetting – technology is moving quickly and that machine may no longer be available. This would also impact computer equipment, printing presses or even some buildings.

When asking for finance, market value or resale value would come into play. If you are putting some of your plant assets up as collateral, you will need to value them at fair market value. Even then, the finance house will provide a loan at a percentage of this value. It may have to be sold quickly in a distress sale.

Plant assets feature in the sale of a complete business. The book value is only relevant up to a point. And then factors – such as the value of future sales – comes into play.

As you can see, it’s no simple task to value plant assets. If you are in buying, selling or financing, we would like to offer our services.

Call us today on 0860 999 440 or visit and let us be of service.