The methods of Plants & Machinery valuation is determined by the purpose of valuation, for example, if the purpose of the exercise is to ascertain an expected selling / asking price on the open market, then Market Value is the appropriate basis. However, if a closed (private treaty) transaction is envisaged involving a sale to an identified purchaser and one wants to determine the fair price to be paid, then potentially Equitable Value would be appropriate.

Methods of P & M Valuation:

Equitable Value: The estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties that reflects the respective interests of those parties.

Market Value: The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently, and without compulsion.

Fair Value: The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market (sector) participants at the measurement date.