5 benefits of specialised valuations for plant and equipment

Notwithstanding your industry, an accurate and fair purchase price needs to be assigned to all plant and equipment assets; a process referred to as a purchase price allocation or purchase cost allocation.

From office, industrial, and hospitality, to engineering and construction, plant and equipment assets are utilised across all sectors. As these assets can depreciate faster than others, they call for regular, more complex professional valuations.

An inaccurate PPA value can also have a material impact on reported earnings in future periods.

“This can affect market valuations, lending, insurance, and the sale of said assets down the line,” Tony adds. “A PPA ensures the accurate reporting of the acquired company's assets and liabilities on the purchaser’s financial statements. This information is crucial for investors, stakeholders, and regulatory bodies to evaluate the economic worthiness of the assets and financial outcome of the acquisition.”

The challenges that can arise from an incorrect valuation highlight the importance of seeking independent, professional valuation advice early in the transaction cycle. 

Alongside the expertise of a global network and 35 years of local experience, JLL has New Zealand’s largest team of specialist plant and machinery valuers. This specific knowledge ensures all valuations and assumptions are representative of the industry, competition, and market conditions.

As one of the leading valuation firms, JLL can assess and determine fair PPAs and help you to understand all of the conflicting interests and tax implications pertaining specifically to plant and equipment acquisitions.