Valuations of Plant and Machinery – Financial Accounting and Insurance
Valuations of Machinery and Business Assets for financial accounting or insurance purposes each follow a similar path.
- An inspection of the assets at their location
- Preparation of a detailed inventory of the assets on a departmental basis
- Consideration of client’s information including current records and knowledge
- Pricing of the assets on a replacement with new basis for insurance purposes (Reinstatement Cost)
- Depreciation of the gross current replacement cost of the assets to form the Value of plant and equipment
to the business (VPEB) for financial accounting purposes - Submission of written reports defining appropriate values
The Red Book is mandatory for RICS Registered Valuers engaged in the valuation of machinery and business assets for financial accounting purposes.