Plant, Machinery and Industrial Asset Valuation in Kuwait

A plant and machinery valuation establishes the value of industrial assets on the basis that the purpose requires, and itmad provides plant, machinery and industrial asset valuation in Kuwait: insurance reinstatement cost, indemnity value, market value and IFRS written-down replacement cost. Asset values in accounts and insurance schedules drift, because equipment is added and never recorded, disposals stay on the register, and replacement costs move while the sum insured does not. itmad has worked in Kuwait for more than 10 years. Last reviewed: October 2026.

Why asset values drift

Asset values in accounts and insurance schedules drift. Equipment is added and never recorded, disposals stay on the register, and replacement costs move while the sum insured does not. The consequence surfaces at the worst possible moment: at the point of a claim, or during an audit.

Under-insurance and the average clause

The risk that most owners underestimate is not being uninsured but being under-insured. Where the sum insured is less than the full value at risk, many commercial policies apply average: the insurer pays a claim in the same proportion that the sum insured bears to the true value. Insure plant worth 20 million for 12 million, and a 5 million partial loss may settle at 3 million, even though the sum insured comfortably exceeded the loss. That is why insurers ask for a professional valuation.

Bases of valuation

The basis determines the figure, and using the wrong basis produces a number that is accurate and useless. itmad establishes value on the basis that the purpose requires:

• Reinstatement cost newThe cost of replacing the asset with a new equivalent, including freight, duty, installation, commissioning and professional fees. Reinstatement cost new is the basis on which most commercial property and machinery policies are written.
• Indemnity valueReinstatement cost less an allowance for age, wear and obsolescence: what the asset is worth in the current condition of the asset rather than as new.
• Market valueThe amount that the asset would realise in an arm's length transaction between willing parties, used for transfer, sale and security purposes.
• Written-down replacement costReplacement cost adjusted for physical deterioration and functional obsolescence, commonly applied in financial reporting where no active market exists for specialised plant.
• Forced sale valueWhat would be realised under a compressed timescale, relevant to lenders and insolvency situations.
• Reinstatement on a day one basisWhere the policy provides for inflation over the reinstatement period, the declared value on which that adjustment is calculated.

How the valuation is carried out

• Physical inspection and identification of assets, item by item, against the existing register where one exists
• Recording of make, model, serial number, capacity, year and condition
• Identification of assets present but unrecorded, and of registered assets no longer present, both of which are common and both of which distort the figures
• Assessment of condition, remaining life and any modification affecting value
• Establishment of current replacement cost from supplier data, published indices and transaction evidence
• Application of the agreed basis, with adjustments stated rather than embedded
• Consideration of installation, freight, duty and commissioning, which on process plant frequently exceed the equipment cost itself

What the valuation report contains

• An itemised asset schedule with identification details and individual values
• The basis of valuation applied and the definition used
• Assumptions and limitations stated explicitly, including anything not inspected
• Date of valuation and the price levels that the valuation reflects
• Totals by location, department or asset class as required
• Figures in a form suited to insurers and auditors
• Reconciliation against the existing fixed asset register, where the register is provided

When valuations are commissioned

• Insurance placement and renewal, to set or verify the sum insured
• Financial reporting, where assets are carried at revalued amounts
• Acquisition, disposal or transfer of assets between entities
• Securing finance against plant and machinery
• Joint venture formation or dissolution
• Following major capital expenditure that the register does not reflect
• As part of a wider technical due diligence exercise

Independence in valuation

itmad holds no interest in the assets valued, in the insurance placed against the assets, or in any transaction that the assets form part of. itmad does not broker insurance, trade in equipment, or act on a contingent basis.

Related services

Valuation is frequently commissioned alongside risk engineering surveys, where the same site visit informs both the exposure assessment and the values at risk, and alongside technical due diligence where asset condition and value form part of a wider assessment.

Frequently asked questions

What is a plant and machinery valuation?

A plant and machinery valuation establishes the value of industrial assets on the basis that the purpose requires, through physical inspection and identification of assets item by item. The report states the basis of valuation, the assumptions, and an itemised asset schedule with individual values.

Why do insurers ask for a professional valuation?

Where the sum insured is less than the full value at risk, many commercial policies apply average, so the insurer pays a claim in the same proportion that the sum insured bears to the true value. Insuring plant worth 20 million for 12 million means a 5 million partial loss may settle at 3 million.

Which bases of valuation does itmad use?

itmad establishes value on reinstatement cost new, indemnity value, market value, written-down replacement cost, forced sale value, or a day one reinstatement basis, according to the purpose of the valuation. The basis determines the figure, and using the wrong basis produces a number that is accurate and useless.

What does a valuation report contain?

A valuation report contains an itemised asset schedule with identification details and individual values, the basis of valuation applied and the definition used, and assumptions and limitations stated explicitly. The report also states the date of valuation and the price levels reflected, and gives totals by location, department or asset class.

When is a valuation commissioned?

A valuation is commissioned for insurance placement and renewal, to set or verify the sum insured, and for financial reporting where assets are carried at revalued amounts. A valuation is also commissioned for acquisition, disposal or transfer of assets, to secure finance against plant and machinery, and after major capital expenditure that the register does not reflect.

Does itmad broker insurance or trade in equipment?

No. itmad holds no interest in the assets valued, in the insurance placed against the assets, or in any transaction the assets form part of. itmad does not broker insurance, trade in equipment, or act on a contingent basis.