Appraising tangible business assets including: office equipment, decorative accessories, artwork, furniture, computers, business equipment, fleet vehicles and other assets.
If you or your former spouse have a stake in a business, a business asset valuation appraisal is an essential and vital component of the divorce process. Failure to perform this valuation properly is a serious mistake that can significantly harm both your current and future financial interests.
If you are applying for a loan or contemplating bankruptcy a clear statement prepared by a professional appraiser, as to the fair market value of your tangible business assets is an element that you should not overlook.
A professional appraisal will determining the value of what exists as well as what does not and will help prevent any misconceptions as to the true worth of your tangible businesses assets.
Most tangible assets can be readily converted to cash, or are already cash. The amount of money in your bank account is tangible, as is the property your business owns, like vehicles, furniture and equipment. These tangibles, especially if you want to secure a loan, are usually the types of collaerao you provide for the loan. Most banks won’t offer loans to people without tangible assets, even if they have intangible assets that have the potential to make money in the future.
The technical standard for determining Fair Market Value has remained unchanged for more than 35 years. I.R. S. Revenue Ruling 59-60 provides that Fair Market Value is the price that would be demanded and paid in a sale involving a willing buyer under no compulsion to buy and a willing seller under no compulsion to sell, assuming both buyer and seller have reasonable knowledge of the relevant facts about the asset.
If the companies assets must be liquidated two values may be used by the appraiser, depending on the time available for the liquidation process:
Orderly liquidation value. This assumes that the enterprise can afford to sell its assets to the highest bidder. It assumes an orderly sale process. It assumes that the seller can take a reasonable amount of time to sell each asset in its appropriate season and through channels of sale and distribution that fetch the highest price reasonably available.
Distress liquidation value. This is a “fire sale” price. This assumes that the enterprise must sell all its assets at or near the same time, to one or more purchasers. The assumption is that the typical purchaser for the assets is a dealer who specializes in the liquidation of the entire assets of a company. For obvious reasons, the Distress Liquidation Value will always be lower than the Orderly Liquidation Value. Depending on the enterprise and the nature of its assets, the difference between the two values can be dramatic.
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