International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395-0056
Volume: 10 Issue: 05 | Jun 2023
p-ISSN: 2395-0072
www.irjet.net
STUDY ON VALUATION OF PLANT AND MACHINERY – CASE STUDY OF EDM WIRE CUTTING MACHINES Mr. Rohit Prakash Pawar1, 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 - Valuation is a crucial process used to determine
valuations effectively, specialized knowledge and skills are required, along with general qualifications. A competent valuer must not only be familiar with the type of assets being valued but also have an understanding of relevant laws, regulations, and constraints that govern the rights of use and enjoyment of those assets. This introduction provides an overview of the comprehensive nature of valuation, which involves estimating, forecasting, and determining the worth of assets. It emphasizes the interdisciplinary aspects of valuation, covering economic, market, legal, and technical considerations. Additionally, it highlights the various purposes for which valuation may be required, ranging from insurance and taxation to sale/purchase transactions, leasing, and collateral security. Furthermore, the introduction delves into the valuation of plant and machinery, categorizing it into two main categories: assets forming part of the building services installation and manufacturing process plant, machinery, and equipment. The factors influencing the value of plant and machinery are discussed, including physical, social, economic, and legal aspects. Understanding these factors is crucial in estimating the value of machinery accurately. The objectives of this study include gaining a comprehensive understanding of the valuation process, assessing the depreciation factors affecting the value of machinery, estimating the true value of assets in the current market trend, and exploring different valuation methodologies. Additionally, the study aims to evaluate the future expectations of machinery, determine the fair market value of specific equipment, and analyze maintenance and repair histories. It also aims to assess obsolescence and technological advancements that may impact the value of plant and machinery. A literature review is conducted to explore existing research in the field of valuation. The review covers topics such as plant and machinery valuation education, depreciation techniques, the use of Economic Value Added (EVA) in real estate valuation, technology valuation, and valuation for financial reporting purposes. The findings from the literature review contribute to enhancing understanding, improving practices, and promoting professionalism in the field of plant and machinery valuation.
the worth of tangible assets, including properties and other valuable items. This paper provides an introduction to the concept of valuation, highlighting its evolution from an art to a recognized profession. It explains the three primary operations involved in valuation: estimating the cost of producing or replacing physical property, forecasting the monetary earning power of assets, and determining the overall worth of an asset. The paper emphasizes the interdisciplinary nature of valuation, covering economic, market, legal, and technical aspects. It also outlines the various purposes for which valuation may be required, such as insurance, taxation, sale/purchase, leasing, and collateral security. Additionally, the paper explores the valuation of plant and machinery, discussing its different categories and factors influencing its value. The objectives of the study include understanding the valuation process, estimating the true value of assets, and supporting decision-making processes. A literature review is conducted, examining research on plant and machinery valuation education, depreciation techniques, economic value added, technology valuation, and valuation for financial reporting purposes. The findings contribute to enhancing understanding, improving practices, and promoting professionalism in the field of plant and machinery valuation.
Key Words: Methodology, Industrial Property, Field practice, Valuer, Valuation, Market Value, Finance.
1. INTRODUCTION Valuation is a critical process that involves estimating the worth of tangible assets, such as properties and valuable items. Over time, it has evolved from an art or business occupation into a recognized profession. Valuation goes beyond simply assessing physical assets; it also involves evaluating the legal rights associated with ownership of tangible or intangible entities. The process encompasses three primary operations: estimating the cost involved in producing or replacing physical property, forecasting the monetary earning power of specific assets, and determining the overall worth of an asset. Valuation plays a vital role in various financial activities within the economy, including investment decisions, buying and selling transactions, loan approvals, and mortgages. It is particularly significant in business and finance when assessing the value of firms and projects. To perform
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1.1 Plant and machinery valuation
Plant & Machinery valuation may be broadly divided into two categories
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