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Determining the fair market value of computer equipment

Many businesses don’t have a clear idea of the value of their computer equipment.

Computer equipment loses value over time, meaning its fair market worth will no longer be the price you paid for it. After all, technology is constantly evolving and new, more up-to-date models are being regularly released.

What is fair market value?

Fair market value is the price an asset would sell for in the open, free market, assuming both the buyer and seller are knowledgeable about the asset, and the market environment is normal – meaning neither the buyer nor seller are desperate for the item.

There are various reasons why a company might need to determine the fair market value of their computer equipment, for insurance purposes, purchases, or sales, for example.

How to determine the fair market value of your IT equipment

Inventory

Compiling an exhaustive inventory list of what you own makes it a lot easier to determine the market value of your computer assets. You’ll need to know the purchase date, price, and any accrued depreciation in line with your balance sheet.

Once you’ve got your inventory, you need to carry out an audit to ensure that the inventory is accurate and up to date. Physically check each piece of equipment, making a note of the serial and model number, and including photos of the equipment.

Look online to estimate the value

Once you know the equipment you have, look online to get an idea of how much used equipment like yours is selling for.

Looking each item up on eBay is a good place to start – make sure you look at the actual sales price, rather than the asking price.

There are also a number of calculators online, which can help you determine the market worth of your assets, based on the brand, product, and year of production, while sites such as Used Price act as an online blue book to give you an idea of the current value.

Once you’ve collected a range of different prices, add them together and divide them by the total number of values you’ve obtained to get the average value. This should provide a good indication of the fair market value of the equipment.

Cost approach

If the market for your equipment is not active enough to provide a clear value, then you may need to apply the cost approach instead.

This approach involves looking at how much it would cost to replace the equipment, making adjustments for the depreciation of the equipment being valued.

Moving your IT to a subscription service

Having access to the right technology is crucial for the growth and success of businesses in all sectors. But that technology can prove to be costly. As a result, businesses are increasingly turning to leasing to help them access the equipment they need when they need it.

Subscription services bring to life the idea of offering a product or service on a monthly or annual subscription service. This means that businesses can access high-value products, software, tools, or equipment, quickly and easily, without impacting cash flow or having to take large sums of money out of the business. This will also eliminate the need to determine a fair market value for your equipment.

The Device as a Service (DaaS), or Hardware as a Service (HaaS) model, is an extension of Software as a Service. The user is provided with the hardware as well as the necessary software, and the company is invoiced a fixed amount monthly, quarterly, or annually. Services such as insurance and data deletion can also be incorporated into the payment.

Benefits of moving your IT to a subscription service include:

  • Flexibility
  • Access to the latest technology
  • Sustainability
  • Better cash flow
  • Easier budgeting
  • Lower cost of purchase
  • Lower cost of ownership
  • Tailored services and support
  • Improved security

WHY CHOOSE CHG-MERIDIAN?

Looking to upgrade your IT infrastructure? Look no further than CHG-MERIDIAN.

Here at CHG-MERIDIAN, we can help you stay ahead of your competition with tailored solutions that keep you on top of the latest market technologies and trends.

If you want to find out how we can help your business, get in touch today.  Our friendly, helpful, and professional team is always on hand to help.

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