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Site Inspection or Desktop Appraisal?

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Site Inspection or Desktop Appraisal?

A common challenge that arises in capital equipment appraisals for physician practice transactions relates to determining whether a site inspection is beneficial. Depending on the availability and quality of the data, the appropriate scope of the valuation may require a full inventory of the fixed assets; an assessment and reconciliation to the available fixed asset listing; or a desktop analysis. While cost concerns drive a preference to desktop appraisals, they may not always be the most optimal. Some factors to consider when assessing whether a desktop appraisal is appropriate are as follows.

Desktop Appraisals are best when:

  • An accurate listing of the fixed assets is available and includes – historical costs, dates of manufacture, and detailed descriptions of each asset. Ideally, this would be a detailed cost / depreciation schedule that ties back to the balance sheet.
  • The subject assets are fairly new (purchased in the last 5 years).
  • Manufacturer, model number, and serial number can be provided for the major assets, biomed listings, IT listings, etc.).
  • Copies of invoices are readily available.
  • Photographs can be provided to confirm presence, quality, condition, and additional ancillary accessories.

Site inspections are best when:

  • An accurate inventory of all fixed assets;
  • An assessment of the condition of the assets;
  • Time/effort savings for the Client and/or physician practice staff who would typically be responsible for compiling the data/information requested;
  • Photographs of the assets as documentation;
  • Reconciling the fixed-asset listing to what is on site by:
    • Identifying asset disposals/retirements;
    • Identifying assets that are not accounted for on the fixed-asset listing; and
    • Identifying assets that may have not been recorded at historical cost (e.g., used or refurbished equipment purchases, lease buyouts, etc.)


The appraisal of capital equipment can potentially produce widely divergent results depending on whether a site inspection is included in the scope of the appraisal. The data in the fixed-asset listing may include/exclude assets that should not/should be included in the appraisal. The accuracy of the data in the fixed asset listing is the key to determining how widely the FMV would differ based on a desktop appraisal and an appraisal with a site inspection. While desktop appraisals may offer cost advantages, deploying a desktop appraisal without consideration of the facts and circumstances may result in an appraisal that is less accurate, less timely, and more costly than an appraisal that includes a site inspection.