Equipment Appraisal Calculator

This calculator estimates equipment value five ways, all built on a single depreciation figure. Effective Depreciation takes the WORSE (higher) of two measures: age-based straight-line depreciation (Equipment Age divided by Expected Useful Life) and usage-based depreciation (Hours Used divided by Expected Total Hours) -- whichever one implies more wear governs, since equipment that's old but lightly used, or young but heavily used, should still be priced down accordingly. Fair Market Value applies that depreciation to Original Cost, then adjusts for Condition (a 0.3x multiplier at "Poor" up to 1.05x at "Excellent" -- mint condition can command a slight premium over the plain depreciated figure) and Market Demand (0.8x at "Low" up to 1.2x at "High"), with a floor of 5% of Original Cost so the estimate never reaches zero. Orderly Liquidation (70% of FMV) and Forced Liquidation (50% of FMV) discount for a sale under time pressure. The American Society of Appraisers (ASA) -- the machinery and equipment appraisal profession's standard-setting body -- defines these by timeline rather than by percentage: its Orderly Liquidation Value definition assumes a reasonable period to find a buyer (commonly cited as 90 to 180 days), while its Forced Liquidation Value definition assumes a properly advertised public auction conducted with a sense of immediacy (commonly within 30 days) -- so the 70% and 50% figures here are this calculator's working assumptions inside those commonly observed bands, not published ASA percentages.

Replacement Cost New follows the ASA's own published definition -- "the current cost of a similar new property having the nearest equivalent utility as the property being appraised" -- so it is anchored to Original Cost plus a 25% installation-and-setup allowance and does NOT fall as the machine ages, since replacing it means buying a new one. It is not adjusted for price inflation since purchase, so for equipment bought years ago it understates what a new unit costs today. Insurance Value is a simplified actual-cash-value figure: Original Cost less 80% of the straight-line age depreciation (Equipment Age divided by Expected Useful Life), ignoring Condition, Market Demand and Hours Used. The 80% haircut on the depreciation term is this calculator's assumption that insurable value declines more slowly than resale value -- it is not a published factor. Because it is anchored to Original Cost rather than to today's cost to buy a new equivalent, it can sit above Fair Market Value and will understate insurable value for equipment bought years ago in a rising-price market.