In a receivership matter involving a restaurant chain with more than 80 locations across Texas and Oklahoma, my valuation went in front of roughly two dozen opposing attorneys.
About four of them raised questions.
That ratio is the entire job. Anyone can produce a number. The work is producing one that survives contact with a room full of people whose client is paid to prove it wrong.
If you are a lender sizing a borrowing base, an attorney building a case around asset values, or a trustee trying to establish what a pledged collateral pool is actually worth, this is written for you — not for the operator who owns the equipment. Your problem is different from theirs. They need to know what they have. You need a number that will not collapse when someone leans on it.
Book value is not a valuation, and the market keeps proving it
Book value is a depreciation schedule. It reflects an accounting convention chosen years ago, applied on a fixed curve, without reference to what any buyer would actually pay on the day the question is asked.
Most of the time that produces a number that is too low. Sometimes it produces one that is too high. It is almost never right, and the gap is not small.
On a surface coal engagement — five sites across Wyoming, Kentucky, Indiana, and West Virginia, roughly $250 million in equipment, two weeks to deliver — the CFO came in with a book figure he intended to take to his lender. The certified value came back above what he was carrying. He had been understating his own collateral position going into a refinancing.
The market has been reinforcing this. In the first quarter of 2026, RB Global's commercial construction and transportation segment moved 97,800 lots, a 12% year-over-year increase, generating $1.6 billion in gross transaction value — up 27%. More iron crossed the block and the dollars grew faster than the volume. Their market trends reporting showed dozers, excavators, motor graders, and articulated dump trucks maintaining or improving median sale prices despite higher supply.
Supply up, prices up. That is not what a depreciation schedule predicts, and it is not what a credit file built on book value will show you.
Three numbers, three different questions
A significant share of the disputes I see trace back to the wrong standard of value being ordered in the first place. Before scope gets set, it is worth being precise about which question is actually being asked.
Fair Market Value assumes a willing buyer and a willing seller, neither under compulsion, with reasonable exposure to the market. This is the standard for most lending, estate, and matrimonial work. It is the highest of the three and the one most often assumed by default when something else was needed.
Orderly Liquidation Value assumes the assets will be sold, but with adequate time to market them properly — typically several months. This is the working number for most secured lending against equipment collateral, because it reflects what the lender could realistically recover without a fire sale.
Forced Liquidation Value assumes an auction, compressed timeline, and no meaningful ability to wait for the right buyer. This is the workout and foreclosure number.
The spread between FMV and FLV on the same asset list is routinely substantial. In a divorce matter covering 17 dealerships across six brands in California and Nevada — roughly $17 million in assets — establishing Fair Market Value rather than forced-liquidation pricing was the central issue. The two positions were not a rounding error apart, and the choice of standard drove the outcome.
If the engagement letter does not name the standard of value, the report is exposed before the fieldwork starts.
What "defensible" actually requires
A defensible appraisal has three properties. It is developed under a recognized standard, it rests on verified rather than reported data, and its methodology can be explained under cross-examination without the appraiser reaching for adjectives.
Recognized standard. USPAP-aligned development and reporting is the baseline. If the work product does not identify the intended use, intended users, standard of value, effective date, and scope of work, it is not an appraisal — it is an opinion with a cover page.
Verified data. This is where most reports fail, and it is the least glamorous part of the work. Someone has to physically walk the yard, the plant, or the mine and confirm that the assets on the schedule exist, that they are in the described condition, and that they are not counted twice.
Explainable methodology. Cost approach, sales comparison approach, income approach where applicable — with the reasoning for weighting them the way they were weighted, and the market evidence supporting each conclusion, retained in the workfile. A number without a research trail is a number that gets excluded.
What turns up when someone actually walks the site
The value of physical verification is difficult to argue in the abstract and obvious in practice. A sample of what fieldwork has surfaced:
Double-pledged collateral. On an industrial and automotive parts manufacturing receivership — approximately $2 billion in assets across more than 60 locations in the United States and Mexico — the same equipment had been pledged as collateral to multiple lenders. That does not appear in a desktop review of a fixed-asset schedule. It appears when someone matches serial numbers against filings on the ground.
Duplicate asset numbers. On the coal refinancing above, the schedule contained duplicated entries. Uncorrected, they inflate the asset base on paper while doing nothing for the actual recovery position.
Unrecorded field upgrades. Operators modify equipment and often never update the schedule. Those upgrades carry real market value that the borrower is not getting credit for.
No accurate list at all. On a $50 million oil and gas engagement spanning Wyoming, North Dakota, and South Dakota, the deliverable that mattered most to the transaction was the first accurate equipment list the company had ever had. Buyer due diligence could not proceed without it.
Assets with no obvious market. A rare earth elements processing system in Appalachia — roughly $4 million, custom-built, no longer operating — still required defensible resale-market values for insurance purposes. Custom and defunct equipment is exactly where unsupported numbers get challenged, and exactly where comparable evidence is hardest to assemble.
When to order one
Secured lending and refinancing. Before the advance rate is set, not after. Once a credit committee has anchored on a book figure, moving them is significantly harder than starting from a supported number.
Pre-lending collateral validation. On a $15 million machine shop engagement, the lender ordered the work before funding. The depreciation schedule was rebuilt and an itemized equipment list created from scratch — the borrower had neither.
Receivership and workout. Where the collateral pool is contested and multiple creditors have competing claims, the verification step is the deliverable.
Litigation and expert testimony. Where the number will be challenged directly and the workfile matters as much as the conclusion.
Estate and matrimonial. On a roughly $6 million farm estate spanning two Indiana counties, a conservative, well-supported middle position was accepted by both families. A defensible number does not just win arguments — sometimes it prevents them.
Insurance placement and claims. Where the difference between replacement cost new and actual cash value determines whether a claim payment matches the premium being paid.
On credentials
I hold the Master Certified Machinery and Equipment Appraiser designation. There are 26 of us in the United States.
I mention that for one reason, which is relevant to anyone deciding whom to retain: in a contested matter, the opposing side will examine the appraiser's qualifications before they examine the appraisal. Credentials do not make a number correct. They determine whether the number gets a hearing.
Twenty-plus years. More than 900 engagements across mining, oil and gas, aggregate, heavy construction, manufacturing, and a long list of industries that only came up once. Reports delivered five to seven business days after data collection, against an industry baseline closer to three to four weeks.
The number has to be right. It also has to hold up when someone with a contrary interest reads it closely. Those are two different problems, and the second one is the reason the first one matters.
About the author
Nathan Bazzle, MCMEA, CSBA, holds the Master Certified Machinery and Equipment Appraiser designation — one of 26 in the U.S. — with 20+ years and more than 900 engagements across mining, oil and gas, aggregate, heavy construction, and manufacturing. His appraisal and expert witness work runs through BAZZLE, serving lenders, attorneys, trustees, and industrial operators nationwide.
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