The banks, attorneys and business owners are still working on asset-based loans, litigation, sales agreements and fair value purchase price allocations requiring equipment appraisals.
The economy may have slowed down in Southern Ontario during this unprecedented year of the Covid-19 pandemic, however businesses must continue on providing products, services and also moving forward with purchases and sales of equipment, even buying and selling of the business itself. The banks, attorneys and business owners are still working on asset-based loans, litigation, sales agreements and fair value purchase price allocations requiring equipment appraisals.
With many businesses or areas of the business closed or limited by covid-19 safe practices and restrictions, it has made it difficult for the appraisers and appraisal industry to perform inspections on-site and in the manner they are accustomed to. The fear of being exposed to and spreading the virus, as well as provincially mandated social-distancing has left the appraisal industry looking for alternative solutions for clients. During the complete shut-down when the pandemic was at its worst in Ontario, appraisers were deemed essential for some services, but this didn’t hold true for all equipment appraisers. And, now that we are looking at the second wave and potential strict restrictions again, it has left those in business needing equipment appraisals wondering what can be done.
The Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) recognizes a modified appraisal, otherwise known as an uninspected appraisal as an acceptable means of providing an equipment valuation. This type of inspection does not require a physical inspection. We will require enough detail on the equipment and will have to disclose whether an inspection took place or not, but can still provide a credible appraisal for those companies in need of an equipment appraisal now.