Next time you walk into a grocery store, take a moment to appreciate all the equipment on the sales floor –– from the cantilevered gondola shelves to the automated checkout stands, the food bar, water dispensing machine, and of course, all the refrigerated display cases: enclosed freezers, reach-in refrigerated cases, the open topped freezer boxes that hold fish sticks and frozen chickens, the deli cases … and the equipment you don't see: the walk-in coolers and freezers and the refrigeration compression system that most grocery store visitors never see.
In 1998, reacting to California's overall poor air quality, the federal government threatened to cut off or reduce the state's allocation of federal highway funds as allowed through the US Federal Clean Air Act, which, overhauled with the Clean Air Act Amendments of 1990, mandates that every state meet the National Ambient Air Quality standards. In response, the California Air Resources Board (CARB) in September 2000, adopted the Diesel Risk Re duction Plan (Diesel RRP or Plan). RRP recommends many control measures to reduce risks associated with diesel particulate matter (PM) and achieve a goal of 75 percent PM reduction by 2010 and 85 percent by 2020. These CARB regulations may be a harb inger of national change as many other states, also out of compliance with the Federal Clean Air Act, are poised to adopt similar diesel emission rules.
RN's Beverly McFarland and her associate, Kevin Whelan of The Beverly Group, Inc., recently gave a presentation in San Francisco to the Northern California Chapter of the American Society of Appraisers ("ASA") on "Challenges of Appraising Special Assets". The emphasis was on the appraisal of assets in chapter 11 bankruptcies and receiverships and the differences between the two entities and how they are administered. Through the new acquaintances that we met that evening, we discovered some fascinating appraisals that members of the ASA have completed that we would like to share with Receivership News readers.
As pointed out in the previous Leased Equipment post, today's equipment lessor must be more knowledgeable than ever before about the value of leased equipment: Many leasing decisions, from the initial transaction pricing through the ultimate disposition of the equipment, are based on the value of the underlying asset. In addition, it's critical to have an accurate projection of residual values.
Over the years, I've done a number of valuations on leased equipment for various reasons. It's almost aways the case that the folks who are leasing the equipment and the folks who own it don't agree on what the value of the equipment is or even what the premise of value should be for the equipment being appraised. Most equipment appraisers would probably agree that valuing leased equipment is more straightforward if the contract specifies a premise of value, but we know we can't count on that. What we can count on is that equipment lessors will continue to need their equipment appraised. This post is really for them. And I want to thank Bob Podwalny, again, for the generous contribution of his knowledge and experience in this area.