Medical groups often expend time and energy haggling over intangible assets (goodwill) when setting a buy-in price. But they seldom give enough thought to valuation methods for tangible items like furniture, equipment, computers, supplies and practice-owned real estate. Have your accountant or consultant help your group agree on a reasonable approach to produce a fair and equitable figure for these items.
Just make sure you base your calculations on the useful life of the asset:
· Depreciate furniture and equipment over an average 12-year period.
· Value most items still in use after full depreciation at about 20% of original cost.
· Depreciate computers and other high-tech equipment over three to five years at most.
· Use equipment vendors or qualified appraisers to set a resale figure for specialized medical equipment. Take the average of at least two appraisals.
· Count inventory like supplies on a percentage of total cost for the year, estimating a “shelf life” of a few months.
· If applicable, depreciate autos over five years and use “bluebook” values.