How do I cost used office furniture?

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Request for Question Clarification by tutuzdad-ga on 06 Dec 2002 12:44 PST

I don't understand your question. Can you rephrase it please?

tutuzdad-ga

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Clarification of Question by all4inc-ga on 06 Dec 2002 13:27 PST

I am trying to figure out how to establish a fair market value price
for used office furniture that is 5 years old.  My landlord has quoted
us a price and I want to be able to ground-truth it.  For example,
used furniture dealer might buy it at around 25% of cost.

Hi all4inc-ga

If you’re talking depreciation, then you can take a look at any of the
below depreciation schedules and get a sense of the rate of
depreciation of office furniture.

The IRS uses a 7-year depreciation schedule for office furniture

Report calls for changes to antiquated tax depreciation laws that
cheat today's businesses
http://www.bankrate.com/bhn/news/biz/tax/20000817.asp


Beyond the IRS, the norm seems to be between 15% and 20% per year,
fully depreciating within 5-7 years. It seems unanimously agreed that
office furniture becomes worthless at 10 years old.

(For the pdf files, use the search function to search the term:
furniture)

FURNITURE & FIXTURES DEPRECIATION SCHEDULE
http://www.state.mt.us/revenue/content/2forindividuals/01taxeslicensesfees/d-propertytax/depreciation_schedules/PPBA-22A.pdf


Fixed Asset Equipment Depreciation Schedule
http://www.dartmouth.edu/~purchase/Fixed/fixedequipdeprsched.html


2002 UNTRENDED PERCENT GOOD (DEPRECIATION) SCHEDULE
(FOR USE ON REPLACEMENT/REPRODUCTION COST NEW)
*see footnote on this page re: furniture
http://www.ccappraiser.com/depreciation.pdf

Financial Statements
http://www.croquet.org.nz/news/AGM/11agm_finance.htm


As far as actual resale value, that would depend on how you plan to
sell it and how much furniture you have and possibly even where you
are located. There are many companies that specialize in buying
bulk-lots of office furniture. Unfortunately there are no standard
guidelines for valuating used furniture.

“Valuation: Because there are no industry standards for establishing
value, it is virtually impossible for the average person to accurately
determine the value of used office furniture.”

FACILITY NETWORK - Time and Assets
http://www.facilitynetwork.net/Services/Selling/Time___Assets/time___assets.html


You would have to have a couple of different valuations done to
determine what you furniture is worth. Here’s where you could start:


GOOGLE SEARCH RESULTS:  used office furniture buy
://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=used+office+furniture+buy&btnG=Google+Search


Finally, if you don’t think that you can get your money’s worth
selling your furniture, there is always the donation option. Donate to
a charity and take the tax deduction –

GOOGLE SEARCH RESULTS: used office furniture donate
://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=used+office+furniture+donate


Based on all of the above, I would say that any offer between 30% and
50% of new value would be within ballpark for 5 year old office
furniture.

Thanks for the question –

K~

Search terms:

Furniture depreciation schedule
“Office furniture” depreciation schedule
used office furniture valuation

ALL4INC,

Assuming you are looking for a "fair" price, you might want to consider
your purchase price as subtracting the depreciated value of the furniture
(typically straight line depreciated over 7 years) from the original price
of the furniture - this would be the remaining "fair value" of the furniture.
And then consider giving a percentage of this "fair value" based on overall
rating you would give the furniture (ie. 100% Excellent, 80% Good, 60% Fair,
40% OK, 20% Poor).

Check:
http://www.fixedassetinfo.com/defaultCalc.asp
for furniture calculator.

Put calls in to used office furniture dealers in your area for a
quote, then compare with the offer you got.  If you find a better
deal, run with it.