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05-04-2008, 14:09

That is the underlying problem concerning depreciation and all those books. So here is some book s@#$ for you to ponder.

At 10% depreciation per year for 10 years, your coach is worth nothing. Right?? We all know that is not so. That may be good for tax purposes but not for much else. Certainly not you wallet.

In accounting, the "salvage value" or interchangeably used "residual value" of an asset is its remaining value after depreciation has occurred based on an established useful life. It is supposed to represent the net cash inflow that occurs when the asset is sold at the end of its useful life. Well, your coach has not yet met its useful life and neither has mine and if properly maintained will proceed for who knows how long.

So you try applying "intrinsic value" which is the actual value of the asset based on the underlying perception of its true value taking into effect all aspects of its components in terms of both tangible and intangible
factors. This value may or may not be an indication of current market value. Buyers and sellers establish market value based on emotions, desires and touching and feeling.

Plainly stated, if a coach is properly maintained and cared for it has an indefinite useful life so the likely event is the "residual value" will reach a stable point and even possibly climb some in future years based on if nothing more, inflation. That is, unless it is reduced to an ingot, it will never be worth nothing and will eventually reach a point in its life where depreciation is a mute point.

Whew,

Price you coach accordingly. lol

Leroy Eckert
1990 WB-40 Smoke N Mirrors
Dahlonega, GA
Royale Conversion
erniecarpet@... wrote:

In a message dated 5/4/2008 7:17:57 P.M. Central Standard Time, birdshill123@yahoo.com writes:

. I think after the first year it is 10% a year.

Does that formula extend to us that have 25 year old coaches? If so- mine's not worth anything??

Ernie Ekberg
83PT40
Livingston, Montana

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