How to Find Out Appraisals on Used Logging Machinery

Machinery values require analysis and calculation.

Appraisal values of used machinery are often a resource for decisions about useful life, retirement, depreciation or sales. In the case of logging machinery, additional challenges of location, age, logistics or business strategy may affect both appraisal values and ease of obtaining information.



While the existence of on-line auctions, sales or equipment clearing houses may offer the prospect of easily obtainable value information, "first round" data may need adjustment or interpretation.

Things You'll Need

• As a base for information gathering, a researcher will need:
• Asset list specifying make, model, hours and time since overhaul of each piece to be investigated.
• Internet search access.
• Spreadsheet software or database software.

Instructions

Prepare the Target List; Then Evaluate

1. 

   A simple spreadsheet will ease decison making.

   Format an inventory of the pieces under investigation using either spreadsheet or database software. Later on, data items such as make, model, age, running hours and time since last overhaul will be important comparisons, so make these fields easy to use and handy.

   Include information about physical location, cost and accumulated depreciation to the same file if available. It will ease the research or decision process.

2. 

   Use internet resources in a focused manner.

   Use an Internet browser to search for equipment resale websites and dealer websites in the general region or area near where the pieces are located. In modern logging, the dispersal of equipment and small field concentrations of only a few pieces per site hinder the traditional "marshaling" of pieces to afford a unified sale.

   When viewing resale sites, the goal is to assess similar pieces and how much they are offered for. When viewing dealer sites, the goal is contact information, nothing else.

3. 

   Interviewing is a powerful tool.

   Interview website operators or dealer management to get their opinions, feelings and insight about the equipment being analyzed. Some questions to ask in a phone interview include: what is the gross margin expected on sales, what rigging charges or transportation charges are assessed when taking a piece on consignment, what geographic radius is acceptable for pieces for sale?

4. 

   Utilize the research source thoroughly.

   Raise other questions that may come to mind. The key to utilizing interview resources is to be open to the interviewee's lead and be polite. These information sources, along with auction results, may be the only base-level data sources available.

5. 

   Value adjustment is the final and toughest phase.

   Taking into account factors such as age disparity, condition disparity, hours variances, margin expectations and logistics costs, increase or decrease the public values found by dollar amounts that reflect the equipment's differing attributes.

   This step requires some degree of judgment and experience. In the case of a large body of equipment, the services of an appraiser or auctioneer may be required. This is not a step to economize on if the asset pool is large or the resulting decision will be a sell versus retain or a business-continuity decision.

   .

6. 

   Outside experts might provide assistance.

   Seek assistance. With the current economic conditions of timber, sawmill and value-added processes sometimes not in sync, an outside expert's assistance might prove invaluable. Resources that might provide assistance include CPAs, machinery and equipment appraisers, and specialty market analysts.

Tips & Warnings

• Tips:

• Weather conditions may affect or preclude removal of equipment from specific locations.

• Rigging for transport may require partial dis-assembly of some pieces.

• Profit margins desired may vary from one dealer or auctioneer to another.

• The next owner's cost of funds may impact any offered transaction price.

References

• AMEA Appraiser Referral Tool
• ASA Appraisal Value Definitions
• ASA Appraiser Referral Tool
• Forestry Equipment Sales Inc.
• Forestry Equipment Dealer Sources