International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395-0056
Volume: 10 Issue: 06 | Jun 2023
p-ISSN: 2395-0072
www.irjet.net
STUDY ON VALUATION OF PLANT AND MACHINERY – CASE STUDY OF GEAR SHAFT MANUFACTURING PLANT Mr. Kaushik Dixit1, Prof. Amol K. Raundal2 1M. Tech, Valuation (Plant and Machinery) Student, Sandip University, Nashik, Maharashtra, India 2 Professor, Sandip University, Nashik, Maharashtra, India
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Abstract - The objective of this project was to evaluate the
The value of physical plant and machinery is derived from the interests associated with the assets. Any business transaction involving these assets is based on settling the interests of individuals in the various assets and liabilities of the business entity. Therefore, valuing plant and machinery in isolation from these interests is meaningless. The value of the assets depends on the needs, desires, and paying capacity of the individuals involved.
fair market value of a Gear shaft manufacturing plant by conducting individual asset-based valuations. All assessed assets were found to have positive values, indicating their worth in the market. Factors such as market prices, maintenance history, and obsolescence were taken into account to determine the fair market value of specific machines. The project contributes to transparent financial reporting and assists in making informed decisions regarding asset management and financial planning. In summary, it offers valuable insights into the valuation of plant and machinery assets.
To quantify the interests of the parties involved, several essential elements should be considered. These include utility, marketability, scarcity, and transferability of the plant and machinery. Additionally, factors such as physical attributes, legal aspects, social factors, and economic conditions associated with the assets need to be taken into account. Estimating the value requires the quantification of these qualitative factors, assigning appropriate weightage to each factor based on the purpose of the valuation.
Key Words: Gear shaft manufacturing, Plant and machinery Valuation, Fair market value, Obsolescence.
1. INTRODUCTION Valuation is the process of estimating the value of tangible assets, carried out by approved individuals or organizations to meet the requirements of interested parties. It has evolved from an art or business occupation into a recognized profession. Valuation involves estimating the cost of producing or replacing physical property, forecasting the monetary earning power of certain classes of property, and determining the overall worth of assets. It plays a crucial role in financial activities such as investments, buying and selling transactions, and loan approvals. Specialized knowledge and abilities, along with an understanding of relevant laws and regulations, are necessary for accurate and reliable valuations.
Factors influencing the value of machinery include:
Considering and evaluating these factors is crucial in determining the value of plant and machinery.
2. PROCEDURE FOR THE VALUATION OF PLANT AND MACHINERY
1.1 Plant and machinery valuation Plant and machinery valuation can be divided into two categories:
The standard procedure for conducting the valuation of plant and machinery is as follows;
I. Assets that are part of the factory or commercial building services installation, typically included in the valuation of land and buildings. II. Manufacturing process plant, machinery, and equipment, along with other items like furniture, vehicles, and tools, installed for the occupier's industrial or commercial processes.
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Physical factors: Model, make, type, capacity, etc. Social factors: Consumer preferences, tastes, and requirements. Economic factors: Investment, demand and supply dynamics, interest rates. Legal factors: Taxation policies, industrial regulations, environmental protection acts.
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