The equipment you depend on for your business every day is essential. But it is also essential to know how long you’ll be able to use that equipment and when you’ll be required to retire the equipment and replace it with newer, updated equipment. At Backes Auction, we’re here to help you understand how you can best determine the lifespan of your equipment.
Useful Life vs. Actual Life
There is a difference between the useful lifespan of equipment and its actual lifespan. Your equipment’s useful life is how long it can be expected to maintain its highest level of performance with little maintenance. The actual lifespan of your equipment is how long your equipment lasts overall, which can be much longer than its useful lifespan. The longer your equipment goes past its useful life, the more you can expect to pay for repairs and maintenance.
Determining Your Equipment’s Useful Lifespan
There are several options available to you to assist you in determining an asset’s useful lifespan. These options include:
Use the IRS Publication 946 as a Resource
The Internal Revenue Service’s Publication 946 is a resource that can aid you in assessing how your asset may depreciate in value over time.
Consult Your Equipment’s Manufacturer Specifications
Many manufacturers provide resources to purchasers about what they can expect for a useful lifespan. We recommend trying to get this information during the sales process because then you can use the information in deciding how you use your equipment going forward.
Trust Your Own Experience
Regardless of your industry, there is no substitute for experience. Whether your business’s equipment needs are centered around computers, heavy machinery or anything in between, you can use your past experience with your equipment to gauge how long it's useful lifespan will be for future use.
Whether you’re looking to sell equipment that may be past its useful life or purchase new equipment, Backes Auction can help you. Please contact us to learn more about how we can serve your auction needs.