Just because your machinery is fully depreciated doesn’t mean it’s worthless
We see a lot of company accountants and owners who think that just because a piece of equipment is written down to zero and of no use to them it’s probably of no worth. The reality is the book value of plant you hold in your books and how useful an item is to you has no absolutely bearing on its real value to the outside world.
You see, while an item may be worth nothing to you, or might be fully depreciated, it might be worth something to someone else – and we are not just talking for spares, some ‘old but goody’ plant is really holding its value despite all the innovation that’s happening. Depreciation is just an accountancy entry in the books, it’s not a real measure of how much your asset is falling in value through age or use, so the net carrying value can be far removed from what it’s worth to someone else.
Many times have we sold an item management thought was valueless, putting a good amount of money into the company’s bank account, giving them an unexpected cash boost.
What do you have that’s fully written down that we could sell and generate for you? Perhaps it’s worth asking yourself ‘What’s my fully written plant and machinery really worth?’