Posted: 2023 | Pages: 73 | Format: MS Word | Chapters: 1-5 | Others: Questionnaires & References

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ABSTRACT

Problems and prospects of plant and machinery valuation: A case study of shell Petroleum Development Company (PDC), Port-Harcourt, Rivers state, Nigeria.  It was observed that machinery and plant in big and small firms have broken down, due to over anticipation of continuous profit without subsequent periodic valuation of the plant and machinery so as to know their economic life and production ability. Most of the investors have subjected these machines to a greater work load as a result of its newness, without acknowledging that newly installed machines depreciate faster in usage while, it reduces its rate of production as it grows older. When these machines are over –used, they tend to retain their physical look while their functional units have grown obsolete. The problem of this study is to identify those challenges as well as beneficial opportunities that are available in carrying out such valuation. The aim of this study is to identifying the problems and prospects of plant and machinery valuation and suggest possible solutions to those problems. The research questions rightly address the problems of the study and the methods that can be adopted in solving the problems. To carry out a successful research work, a number of hypotheses have to be tested to determine their tenacity. This research adopts descriptive survey research design in collecting data. In the field work, questionnaires and oral interviews are conducted on the researcher’s chosen random sample population. The collected (returned) questionnaires are analyzed using percentiles, tables, histogram, pie chart and statistical approach like Yaro Yamane.  The resultant finding culminates in the stated recommendations and suggestions for further researches on the subject mater.

CHAPTER ONE

• INTRODUCTION

     The valuation of plant and machinery is one of the most challenging tasks in the field of state management profession; the estate surveyor is recognized as more of an expert in valuation work by the public. The values maybe called upon on a number of occasions to give his opinion as to the value of various asserts for some reasons. The asset that may be valued can be grouped principally into

1. Land and building for various uses
2. Agricultural properties e.g crops, trees etc

• Plant and machinery and other assets.

The valuation of plant and machinery embraces the identification and valuation of all types of machineries in the commercial or industrial establishment for the function of that business in any economy managers of organizations are expected to give an account of their steward ship to the shareholders on quarterly. This is so, in order to be able to monitor the progress or failure of the business. This will help the investor to adjust his portfolio for a more profiting investment.

Plant and machinery are terms that, over the years, have

Been interchangeably used but, in the reality of practice, the term plant can be used to encompass machinery too.

       The term machine has been defined by encyclopedia of English Language as a device having a unique purpose that replaces human or animal effort for the accomplishment of physical task.

       Plant is defined as the equipment including the fixture, machinery, tools etc.

       The term machinery has a closely related meaning to machine except that machinery is defined as an assemblage of machines.

       Valuation is the term for determining the value of problems encountered in the valuation of plant and machinery thus:

1. Internal problem
2. External problem

       Internal problem: includes the choice of appropriate valuation methods to adopt for different purposes among others or, problem arising from the technicalities in the valuation process.  

   External problem: this includes the technological aspect of plant and machinery in question and the clients.

1.1  BACKGROUND OF THE STUDY

     Plant and machinery valuation has been practiced in various part of the world since nineteenth century especially in the united-kingdom. The earliest record can be traced to a stage in the level of civilization of the early man, when he can examine his tools, farm implements and determine when they are old enough for a replacement is as simple as origin of plant and machinery valuation.         

    Plant and machinery valuation today has its root firmly established in the estate management profession in the middle of nineteenth century, when it was largely based upon the textile industry in the North of England. The machines then were mostly manually operated and as time go on, the industrial revolution came up and there were more complexity in the technology advancement with greater risks. All these gave birth to what we today know as plant and machinery. The aim of embarking on their valuation was to provide adequate cover for the risks, to determine the problems associated with the valuation of plant and machinery etc.

       The Nigeria institution of estate surveyors and valuers (NIESV) which is the body that is responsible for the regulation of the practice of land and building, management and valuation in all its ramifications in Nigeria has been fighting to establish its members as the appropriate and qualified professional for this job and this has been considered successful. Despite the recent attempt by the engineers who claim by virtue of their knowledge of the operation and principle of machine, the right to execute the valuation of same plant and machinery.