Valuation methodology

At Canadian Commercial Appraisers Group Inc. we employ a detailed methodology developed in compliance with appraisal standards. This methodology consistently results in a reasonable, timely and cost effective opinion of value:

1. Determine the appropriate scope of work

After receiving an assignment request by the client or financial institution, questions such as the nature of the assignment, the intended use, the fee structure and the particular assets or inventory to be appraised need to be answered before moving forward. There are several elements of the client's appraisal problem that must be properly understood by the machinery appraiser before the appraiser can proceed. This first step in the appraisal process is called problem identification, and is the most important challenge the machinery appraiser faces in every appraisal assignment. STANDARD RULE 7-2 of USPAP establishes the elements and requirements of problem identification. The elements that must be identified include intended use, intended user(s), the effective date, the type and definition of value, the relevant property characteristics and assignment conditions. Intended use, or purpose for the appraisal, is by far the most important to determine with the client. Proper problem Identification is necessary to determine whether the appraiser is competent to complete the assignment credibly, and then determine the scope of work that will be necessary to solve the client's appraisal problem credibly.

2. Site inspection, data collection and analysis

Whether we are to appraise assets or inventory, Canadian Commercial Appraisers Group understands the background of the company, the nature of the industry and other key factors by interviewing the key management, and references current industry sources.

For the great majority of fixed asset appraisals, an onsite inspection of the assets is the basis to determine condition, age, obsolescence and other factors that could affect the value.

The inspection includes a description of the assets, gathering of important details such as models and serial numbers, digital photographs or videos of the assets at the site and any other important details that affect value.

3. Application of approaches to value

Upon completion of the inspection, our appraisal and research team start applying different analytical methods in order to come to a value conclusion. Based on the nature of the assets, and the intended use of the appraisal, different methods are employed. For example, if a going concern value of a plant is required, we may employ the cost approach to determine the value of this plant after obsolescence along with individual valuations of different movable equipment (transportation and construction). Next, this is compared to similar sales of other plants (adjusted for capacity, obsolescence, age, condition and nature of the transaction) to verify the conclusions. This detailed, multi-pronged approach allows for a reasonable estimate of value that has been derived by experts with a wealth of experience, skill and expertise.

4. Reconciliation of value indications and final opinion of value

All appraisal assignments are reviewed to ensure the correctness of the approach, the utilization to all relevant data and validity of the assumptions made. Finally, the appraisal report is produced and delivered to the client. All our appraisals conform to USPAP (The Uniform Standards of Professional Appraisal Practice).

Desktop Machinery and Equipment Appraisals

Circumstances do allow the machinery and equipment appraisal process to proceed without an onsite inspection of the assets. We can provide you with a desktop equipment appraisal which can save you considerable time and money. You would be responsible for collecting all of the physical data on the machinery and equipment you want appraised. 

At a minimum we require you to provide us the following:

1. Itemized list of machinery and equipment to be appraised;

2. Manufacturer;

3. Model;

4. Serial Number;

5. Original costs and dates of acquisition;

6. Photographs of the machinery and equipment.

Once we receive this information, we can commence your machinery and equipment desktop appraisal and have it back to you within a few days.