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 DRIP IRRIGATION PIPE EXTRUSION MACHINERY Mr. Eshwar Tushar Kawale1, Prof. Amol K. Raundal2 1Student, MTech Valuation (Plant and Machinery), Sandip University, Nashik, Maharashtra, India 2 Professor, Sandip University, Nashik, Maharashtra, India
----------------------------------------------------------------------------***--------------------------------------------------------------Valuation serves as a crucial tool for decision-making, Abstract - The project report focused on determining the financial reporting, and ensuring the integrity of assets.
fair market value of a DRIP irrigation pipe extrusion manufacturing unit. It considered factors such as depreciation, condition, market dynamics, comparative prices, maintenance history, technological advancements, and industry trends. Transparent documentation was provided for accurate financial reporting. The report aided stakeholders in decision-making, risk mitigation, negotiations, tax planning, and compliance efforts. It contributed to the field's knowledge and supported the unit's value optimization. Overall, it served as a comprehensive guide for assessing the unit's fair market value and enhancing its market performance.
1.2. Plant & Machinery and its Valuation Plant and machinery valuation can be categorized into two main types:
Key Words: Maintenance, Assets, plant, machinery, Valuation, Market Value, Depreciation.
However, the value of physical plant and machinery is depending upon the interests of individuals or parties involved in a transaction. Valuing plant and machinery separately from these interests is meaningless. Valuation requires considering factors such as utility, marketability, scarcity, transferability, as well as physical, legal, social, and economic aspects. Each factor should be appropriately weighted based on the purpose of the valuation
1. INTRODUCTION Valuation is the process of estimating the value of tangible assets for various purposes. It involves considering factors such as structure, life, maintenance, and location. Valuation includes creating/replacing property, predicting earnings, and determining overall value. Competent valuers need specialized knowledge, including legal aspects and asset use restrictions. Economic, market, legal, and technical aspects are studied in valuation. Factors like identification, physical parameters, aesthetics, specifications, age, and maintenance influence value. Different approaches and methodologies are used. Valuation relies on data and considers distinct meanings of price, cost, and value. Plant and machinery are valued for both tangible assets and intangible rights derived from ownership. .
2. METHODOLOGY 2.1 Procedure for valuation of Plant & Machinery The standard procedure for conducting the valuation of plant and machinery involves the following steps:
Instruction: Receive clear instructions regarding the scope of work, location, purpose, and date of valuation from the client or the entity requesting the valuation.
Data collection: Obtain necessary data from the client, including a list of plant and machinery to be valued, original cost with a breakdown, year of purchase, and manufacturing process flow diagram. Gather additional information such as ownership details, company history, utilization purposes, maintenance records, electrical layout, capacity, production history, and other relevant documentation.
1.1 Purpose of Valuation Valuation is a complex process that considers various factors and purposes. Valuation may be required for purposes such as new reinstatement insurance, income tax, stamp duty, sale/purchase transactions, leasing, collateral security, foreign collaboration/mergers, B.I.F.R. cases, S.E.B.I. approval/public issues, modernization decisions, disposal, partnership dissolution, mortgage, creditor safety, and book purposes. Each purpose requires a specific valuation approach to determine the value accurately.
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That forming part of the factory or commercial building services installation, which are normally included in valuation of land & buildings those directly related to industrial or commercial processes such as fixtures and fittings, moulds and loose tools.
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