Boat Appraisal

vessel valuation

Since the middle of the last century, the fishing fleet has been modernizing, which has meant that ships currently have modern elements to carry out the fishing activity, to protect human safety, for navigability and even this step to Modernity has allowed ships to have cold chambers to preserve fishing. These new elements have led to ships being considered a highly valuable asset, with growing added value.

What is the valuation of boats?

A boat is considered an investment, because it is expected to generate benefits for the company or individual that owns it, the appraisal of the asset provides the owner with an impartial opinion and an estimate of its value as of a certain date, the valuation of boats provides the owner of the asset to calculate the economic value of said asset.

Why is a boat valuation important?

The boats must have an insurance policy since it is a requirement that allows them to go fishing.

In order for insurance companies to provide insurance policies to vessels, they require a physical inspection report of the vessel detailing its characteristics that allow the insurance company to have elements to determine the degree of reliability or of risk that it represents to provide your services to the vessel, In said report, an important element to consider is an appraisal in which the real value of a vessel is calculated, in order to agree with the insured on the amount for which said vessel will be insured.

Vessel Valuation Methods

It is essential to carry out a physical inspection of the ship to determine its condition, in addition to the fact that this will allow selecting the most appropriate appraisal method to obtain the commercial value of said vessel.

Market-Based Methodology

In this method, the supply and demand of the goods are determined, as well as the recent sales of assets that are similar in the market, with the objective of calculating a reference of the most probable sales price that the assets could have at value.

Methodology based on the cost approach

In this method, the value of a good is compared with the replacement or reproduction cost of a new one that is similar to that good that is the object of the valuation. Loss of value due to depreciation caused by physical deterioration and functional obsolescence must be considered.

Methodology based on the income approach

In this approach, values related to the present value of future benefits derived from the operation of the vessel are estimated, which is generally calculated through the capitalization of a specific level of income.

Why is it necessary to carry out the valuation of boats?

The boats must have an insurance policy, since it is a requirement for them to go fishing, in addition to being used as a guarantee before credit institutions.

A credit institution requires the report of the completion of the inspection and appraisal of the ship to know the real value of said asset, so that the institution can evaluate if it will be able to provide the financing that is requested.

What boats do we value?

cargo ships– Container ship
– Cargo Ships
– General and oversized cargo ships
– Refrigeration or controlled temperature vessels
– Barges
– Tanker ships (gas carriers)
– Multipurpose Vessels
– Rolling transport vessels
– Bulk cargo ships
– Supply ships
– Tankers
–Vehicle carrier
– Semi-submersible vessel
- Ice breaker
– Tanker
– Supertanker
– Tugboat
– Fisherman
– Beacon
– Salvage
Transport Ships- Cruise
– Auxiliaries
– Jet skis
– Open bow boat
– Semi-rigid boats
– Cabin boats and cruise ships
– yachts
- Ferry
- Raft
– Transatlantic
Sailboats– Light sailing boats
– Regatta sailboats
– Sports Sailboat
– Old sailing ship
– Sailboat/Cruise regatta
– Cruise sailboat
– Sailing yacht
– Multihull sailboats
Warships– Auxiliaries
- Aircraft carrier
– Battleship
- Cruise
– Destroyer
– Frigate
– corvette

Port appraisals

A port area generates a certain amount of income constantly, so to guarantee its proper functioning and operations it is important to determine the value that these areas generate. Given this, a port appraisal is used to determine the monetary flow of the area, this with the purpose of preparing financial statements based on the International Financial Reporting Standards.

What kind of methodologies are used?

In order to carry out a port appraisal, it is important to consider that the best way to consider these spaces is as a going concern, since a large amount of cash moves in these spaces, therefore the following procedures are applied:

Physical or net replacement value (cost approach)

Rental capitalization value (income approach)

Discounted cash flow method

How are revenues measured in port valuation?

When considering the income in the ports, various factors are taken into account, depending on the services and operations that are provided, so they are divided as follows:

Independent springs: In the case of this type of docks, the income obtained from docking rights, cargo volumes, maintenance, boat launching, garbage recovery, among other income, is considered.

Marinas: In this case, docking rights are considered, commercial premises that are concessioned or rented, use of dry docks, storage and equipment of different vessels, sale of spaces, time sharing and lodging, service to vessels, electrical energy.  

Port terminals: For these places, rights that exist in the port are considered, the income from the areas, transfers of rights, income that comes from transfers of rights.

Ports: These areas consider the following types of income; rent of areas, wharfage, concessions for services, partial transfers of rights, port rights, among others.  

What are the types of port locations that can be valued?

Within the port appraisals there are a series of spaces that are considered important to carry out a process that allows determining the value of these places and in this way to be able to continue with the course of operations.

Port terminals: These sites are considered spaces where an installation or set of facilities is considered that allow a link between land, air and maritime transport and is made up of various elements including:

  • Maritime infrastructures: They consist of all those elements that help ships have access to the port.
  • Land infrastructures: Facilitate the loading and unloading, storage, transport and distribution of the belongings that move in the terminals.
  • Machinery and equipment: They allow the mobility of cargo in an easier and faster way.
  • Personnel: These places must have trained personnel both to operate the machinery and to give merchandise entry and exit, among other operations that are of vital importance for the proper functioning of the places.

Marine: These spaces have port facilities and water and land areas; Its organization allows these areas to have services for boats used for recreation or those specialized.

Seaports: These spaces have different characteristics that are taken into account depending on the size and function they have, so we can consider the following:

  • Commercial ports: They are spaces where the handling and also the transfer of different types of merchandise is carried out.
  • Industrial ports: In these ports the movement of goods that are related to those industries that are in the surroundings of the port is concentrated.
  • Fishing ports: They are specialized in the capture and processing of the fishing industry.
  • Tourist ports: Its main focus is tourism, so you can find boats used by and for tourists and cruise ships
  • Military ports: These ports fulfill specific functions in order to have entry and exit of ships and warships and have military bases.

Why is a port appraisal important?

This type of appraisal is important since it allows us to know the financial situation of the port and the feasibility of it continuing to operate properly over the years.

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