{"id":12222,"date":"2014-07-24T11:21:18","date_gmt":"2014-07-24T15:21:18","guid":{"rendered":"https:\/\/www.certitrek.com\/nebb\/depreciation-of-machinery-and-equipment\/"},"modified":"2022-11-29T09:45:30","modified_gmt":"2022-11-29T14:45:30","slug":"depreciation-of-machinery-and-equipment","status":"publish","type":"post","link":"https:\/\/www.certitrek.com\/nebbinstitute\/blog\/depreciation-of-machinery-and-equipment\/","title":{"rendered":"Depreciation of Machinery and Equipment"},"content":{"rendered":"
Different industries assign different meanings to the word depreciation. Accountants say that it\u2019s the allocation of the cost of an asset across its useful life. Depreciation takes into account normal wear and tear over the asset\u2019s life.<\/p>\n
Machinery and equipment appraisers, however, assign a different meaning to the term. To appraisers, depreciation is the estimated decrease in value of an asset from its initial purchase price. The estimated decrease is based on a number of criteria, such as physical, functional, and\/or economic factors.<\/p>\n
From an appraiser\u2019s perspective, even if an asset is 20 years old, as long as it is still functional or still in use, or if there is an active market for it, the asset has value. From an accounting perspective, its worth would be zero, but if the asset owner sold it, it would be worth more than zero.<\/p>\n
Because it has different definitions, depreciation can be confusing. If you want to sell an asset or discuss its depreciation, it\u2019s always best to speak to a Certified Machinery & Equipment Appraiser (CMEA)<\/a>.<\/p>\n