Appraising medical equipment and related assets has become an integral part of the current healthcare landscape.Many different considerations from facility/practice acquisition to purchasing/lease options drive the need for proper fair market valuations.Because of these considerations, appraising assets is vital to financial understanding for organizations and practices.There are factors that contribute to an accurate valuation and understanding these factors will lead to less confusion and better knowledge of the medical equipment appraisal.
The factors listed, along with a brief description, give a well-rounded view of the considerations and contributors of value in medical equipment and assets:
– Transfer of Title/Ownership Transferring ownership of an asset, new or used, negatively impacts the value of the asset.It is much like buying a car; once you drive it off of the lot, the value drops.
– Condition The condition of the item is also a vital factor in valuing an asset.The better it looks and performs, the more value it has.
– Technology Like many other high-tech industries, medical equipment technology is changing at a rapid pace.Technologically advanced products often carry a higher value than older, less current items.
– Age The older the item, the likelihood is the older the technology.Also to be taken into account is warranty protection and ease of repair due to age.A sub-component of age is useful life and understanding the subject assets position in its projected life helps to project future utility and value.
– Market The new and resale markets are significant influencers of an assets value.A subject asset may be like new and of current technology, but if general market favors another product, the valuation for that item will be impacted.These preferences influence supply and demand in the re-sale market.Adequate supply of an item obviously keeps values down, whereas strong demand minimizes erosion of value.
– Economic Factors– The economy can influence an items value significantly.Sometimes used equipment has a high demand because it traditionally is less expensive.This causes a supply and demand issue that drives prices up, especially on items that are industry standards.The economy can also soften the market for certain equipment, decreasing its value.
–Fixed or Movable Having a piece of equipment that is fixed leads to evaluating the costs of de/re-installation, impacting its value, whereas something movable is much less likely to have those factors included.
These are the common factors that drive the fair market value of medical equipment and assets.MERC is on top of the trends in the market and evaluates these factors when we are providing fair market values, making sure our appraisals are as accurate as possible.As always, please contact us with any questions or comments you have regarding asset valuations/appraisals!
