Valuations of Plant and Equipment – Financial Statements 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 statements
  • 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.