For some, agricultural machinery is just a work tool: a tractor, seeder, harrow, or spreader. For a farm accountant, it’s a fixed asset that must be recorded on the balance sheet and depreciated. And here comes the most interesting part: to do everything correctly, you need to know exactly how much this equipment is worth. Not just “an estimate,” but officially. That’s why there is a need for a professional valuation — of both self-propelled and trailed machinery, as well as mounted implements.
This article isn’t about machines as hardware. It’s about how proper valuation helps farmers avoid mistakes in reporting, avoid conflicts with the tax office, and sleep soundly knowing that everything is in order.
How machinery enters accounting — and why there’s no room for error
We were contacted by an accountant from a small farm in Poltava region. They had bought three units of equipment from Europe — used, but in good condition. The seller listed a lower price “for customs” in the documents, much lower than market value. And the purchase agreement had yet another price. As a result, the accountant didn’t know what value to use for the balance sheet. We performed an independent valuation — and that became the basis for the accounting entry. No questions from auditors, no issues from management.
It’s simple: any fixed asset, including machinery, must be recorded at fair value. If the price in the documents is questionable, or the machinery was received for free (e.g., inheritance, contribution), or if it’s a revaluation — a valuer must be involved. These are the direct requirements of accounting standards and national regulations (P(S)BO 7 “Fixed Assets”).
When an accountant will definitely need machinery valuation
1. Commissioning
When purchasing machinery, it can be hard to determine its real value — especially if it’s used equipment or imported with customs clearance. A valuation helps choose the correct number for the balance sheet, avoiding under- or overstatement.
A farmer from Cherkasy inherited an old but functional tractor. The notary processed the paperwork but without any value specified. When the accountant started preparing the asset for entry, she didn’t know what amount to write. We were called urgently for a valuation — and only then was the tractor added to the balance sheet, with no penalties or follow-up questions from the authorities.
2. Contribution to authorized capital
Often, agricultural business founders contribute not money but property. And the main question becomes: what is that property worth? The tax authority won’t accept a figure “from thin air” — an official valuation report is required.
When starting an agricultural company in Odesa region, two partners agreed: one contributes land, the other — machinery. But without a valuation, it was impossible to register the charter. The tractor and two trailers had a specific value that had to be formalized. We prepared the valuation, the numbers were included in the founding documents, and the notary registered the company without any issues.
3. Revaluation of machinery
If the equipment has been in use for many years and its residual value has depreciated to pennies, the real price obviously doesn’t match what’s on the books. In such cases, the company has the right to revalue its fixed assets. This is especially important when attracting investors or submitting reports to banks.
Before submitting financial reports for new bank financing, one agribusiness realized that all their machinery was recorded using outdated values. We revalued 15 machines, increasing the total balance sheet assets by 3 million. This enabled them to obtain a loan for expansion.
4. Inventory and audit
During inspections of large farms, auditors may require confirmation that machinery is properly accounted for. If there are doubts about the fair value of fixed assets, independent expert valuation becomes essential.
Valuation of mounted equipment: a plow is not “just part of the tractor”
Plows, seeders, cultivators, sprayers, potato planters, mowers, shredders, disc harrows — all of these are separate fixed assets. Many agricultural enterprises mistake mounted equipment for consumables or account for it as “part of the tractor,” which leads to accounting errors.
In fact, each mounted implement should be recorded individually: with its own value, inventory number, and depreciation schedule. To ensure this is done correctly, you need a professional valuation.
One agribusiness owner in Vinnytsia region purchased a tractor via leasing, along with matching implements: a seeder, sprayer, and rotary harrow. The contract listed a total price. When the accountant began recording the assets, she couldn’t break it down into separate units. We valued each implement — and the machinery was properly recorded with correct figures. Most importantly, depreciation was no longer an issue for tax authorities.
Another case — a farm in Ternopil region leased out a tractor with mounted equipment. The lease agreement listed “tractor with plow and harrow” without itemizing the values. A dispute arose over who should cover damage to the plow. After we valued the plow separately, it was legally added to the contract annex, resolving the matter without court.
During inventory at an agri-holding: over 70 units of mounted equipment were listed, but some had no value — “left over from the previous owner.” We visited the site and valued each item — even an old 4-bottom harrow that had been lying around for decades. After the valuation report, the accounting department finally brought the balance sheet into order for the first time in years.
Mounted equipment is often written off, sold, sent for repair, or transferred between departments. Without objective fair value, questions may arise — from tax authorities, auditors, or even from shareholders.
Remember: even an old seeder or a homemade plow has value. That means it must be properly valued and accounted for according to accounting standards.
What does a valuation report include?
You can read more here. In short, the report includes:
- Detailed technical specifications of the equipment.
- Photographic documentation.
- Explanation of valuation methods.
- Sources of market prices, comparables.
- Legally valid conclusion with signature, stamp, and date.
How much does it cost and how long does it take
The cost of valuation starts from 3000 UAH per unit of machinery or mounted equipment. For specific machinery or bulk orders, we offer package pricing with discounts. Standard timeline: 2–3 days, or faster upon request.
We valued over 30 units of mounted equipment for one farm. Everything was completed within 4 days — with photos, descriptions, and conclusions. The owner said: “For the first time, I felt that accounting is not just for the tax office — but for myself too.”
Who to contact
Our company “Real Expert” specializes in the agricultural sector. We work not only with tractors and combines but with any equipment — from basic trailers to modern seeders and cultivators. We prepare documents so that accountants can immediately include them in reports without revisions.
Agricultural machinery is not just an asset — it’s an essential part of the enterprise’s accounting system. Without accurate valuation — it’s a risk. With valuation — it’s order and confidence.
Contact us if you need to put things in order with your equipment, documentation, and values — we’re here to help!
