Reading the assumptions in an equipment valuation
- Topic
- Equipment valuations
- Reading time
- 3 minutes
- Last reviewed
On this page
Read the assumptions before relying on the valuation total. An opinion may concern a specified asset package, condition and sale arrangement that differs from the transaction you are now considering.
An assumption is not automatically a flaw. It identifies part of the basis on which the work proceeds. The problem arises when someone treats an assumed fact as independently verified or silently changes the circumstances while keeping the original figure.
An annotated fictional paragraph
The following wording is invented to illustrate reading questions. It is not a quotation from a standard or a clause to insert into a professional report.
This opinion concerns the assets listed in schedule A, with the accessories identified there. It assumes the seller can offer the stated interests, the equipment's condition is as described in the supplied records, and buyers must remove the assets within the agreed site-access period. The cost treatment is set out separately.
Ask five questions:
- Schedule A: Is this the current asset list, with the correct items and exclusions?
- Accessories: Does the package match what you intend to advertise?
- Interests offered: Has ownership or another party's interest been established, or is it an assumption requiring advice?
- Condition records: Which facts were inspected or verified, and which came from your information?
- Removal and costs: Are the access period and allocation of expenses the ones that will actually apply?
If the answer is unclear, ask the valuer to explain the relevant section. Do not rewrite the report yourself to make it fit the sale.
Compare the instruction with the result
The valuation brief should identify the intended purpose and scope. If you later requested changes, preserve those instructions as well. When comparing two reports, inspect assumptions before deciding that differing totals are a disagreement about the same asset.
Watch the assumptions most likely to move
In a disposal project, the asset package, time available and site arrangements can change quickly. A machine may lose an accessory, need further condition assessment or remain in use longer than expected.
The in-place and removal guide explores the sale premise. The cost-treatment guide helps prevent an opinion from being mistaken for a net cash forecast. These are different questions, and both can matter even when the machine itself looks unchanged.
Return changes to the person responsible
Send the valuer a short change note: asset reference, original assumption, new fact, supporting evidence and the decision you need to make. Ask whether the opinion needs clarification or further work. Keep the response with the original report.
When working with UK Auction Group, discuss the assumptions openly at the instruction stage and again if the sale circumstances change. A figure is useful when the reader understands the conditions that come with it.
Explore the valuations guides.
Professional reference: RICS.
Sources
This guide gives general information. Equipment-specific, legal, tax and safety decisions may need a qualified adviser or competent specialist. The guides do not promise sale prices, fees or results.