How to depreciate tangible assets for partner buy-ins

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.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.