Equipment Appraisal Blog | Understanding Machinery Appraisals

How to Determine Physical Deterioration for Asset Depreciation

Posted by Equipment Appraisal Services on Fri, Apr 24, 2015 @ 01:14 PM

physical asset deterioration depreciation

Building on the framework of understanding an asset’s effective age, one can then begin to look at that asset’s physical deterioration.  Physical deterioration is simply an effect of depreciation on an asset caused by physical means, not including economic or functional obsolescence.  In order to find the physical deterioration, take the asset’s anticipated physical life (how long it is supposed to last) and divide it by the effective age.

For an example of this concept, assume an asset has a physical life of 10 years and an effective age of 5 years. With these assumptions, 50% would be the apparent physical deterioration.  This, in the appraisal world, is what is known as the age/life ratio. 

There is the possibility, however, that the asset mentioned may outlive its physical life.  This is where effective age becomes an important factor of the equation. Sometimes, an asset can be taken care of to the point that its effective age outlasts the physical age, which requires the physical deterioration to be altered.  In this case, instead of using merely the physical life in the denominator of the equation, the sum of the effective age and remaining physical life of the asset would be used.  If the physical life were to be used when the effective age is greater than it, it would indicate more than 100% physical deterioration, giving the impression that the asset does not function.

Expanding from the first example, supposed that this same asset still has the physical life of 10 years but has now progressed to have an effective age of 12 years.  This may have been due to a rebuild or overhaul on the equipment. In the process, it has been determined that the asset physically has a remaining physical life of 3 more years.  As a result, the physical deterioration would be 12/12+3, indicating an 80% physical deterioration.

Putting this concept to use, an owner of an asset can use information to determine how much functionality has been used up from an asset, which may assist in its valuation.

Tags: Equipment Appraisal, Physical Deterioration, Asset Depreciation and Honda celebrate National Robotics Week with start of Industrial Robot Online Auction

Posted by Equipment Appraisal Services on Mon, Apr 06, 2015 @ 12:46 PM


Youngstown, Ohio ---, LLC today announced the start of the sale of 19 industrial robots currently utilized at the Honda of Canada automotive assembly plant in Ontario, Canada.

This week celebrates the sixth annual National Robotics Week, a special week designed to educate the public about how robotics technology provides an important impact on society. Leading universities and companies have come together to promote the benefits of robotics. In conjunction with this week, these robots are being made available to the general public for purchase. Currently utilized by Honda, the robots are fully equipped and can be relocated for use in educational or other industrial facilities.


The available robots include Yaskawa Motoman models UP60, UP120, UP130, UP165, UP200, K300, and SK16. In addition to the robots, there is miscellaneous material handling equipment available.

The online auction is currently underway and runs through April 30, 2015. It is in the form of an “absolute auction” with no buyer premium.

Companies looking for used equipment from a world-class manufacturing facility are encouraged to sign up as registered bidders, view, and bid on the available lots at

About, LLC: is an online equipment auction mediation company that provides a marketplace for machinery & equipment buyers and sellers. Through its sister company, Equipment Appraisal Services, the company also provides machinery and equipment appraisals for accounting, banking, and legal purposes for both public and private companies. For more information about, please visit For more information about Equipment Appraisal Services, please visit

Tags: Equipment Appraisal, Equipment Auction, Robotics, National Robotics Week