Fair Market Value for computers

April 14, 2005 12:13 PM

Where can I go to get a formal fair market value quote for a certain model PC?

My company is looking to disposition a fair amount of older machines (manuf. in 2000) and needs several quotes to estimate the fair market value for these assets. I'm finding that no one is really interested in purchasing any PCs of this caliber, but that doesn't matter so much. We're more interested in the quote than the sale. My Googlefoo isn't helping this time. Any ideas where one could go for this?

posted by sublivious to computers & internet (19 comments total)

Have you tried looking up recent sales on eBay?
posted by caddis at 12:21 PM on April 14, 2005

Ebay?
posted by Ferrari328 at 12:23 PM on April 14, 2005

eBay is not formal enough. Our law and tax departments require, at the minimum, it be printed on company letterhead.
posted by sublivious at 12:25 PM on April 14, 2005

Well, if you want you can pay me and I'll take a guess and print it on some letterhead.
posted by delmoi at 12:28 PM on April 14, 2005

I'm not sure how you'd work out the "company letterhead" requirement, but it occurs to me that insurance companies must pay out claims on stolen and damaged computers. Surely they have some system for determining the value of such a machine. And I assume that this system would be, if not holy writ, then at least capable of withstanding legal challenges.

If your company is big enough to have law and tax departments, I'm guessing it pays a fairly impressive insurance premium (relative to that paid by an individual, at least) or three. So while your insurance company is under no obligation to help you with valuing your computers, they may, since you pay them lots of money, be willing to go above and beyond the call and answer a few questions.
posted by Clay201 at 12:39 PM on April 14, 2005

From a legal and tax perspective actual sales data from eBay would be sufficient. After you beat yourself up sufficiently searching for non-existent "quotes" for antiquated computer equipment, start beating up the lawyers and accountants. That is, respectfully inform them that the information they request is not to be had, and then present them with actual sales data. They will likely relent.
posted by caddis at 12:54 PM on April 14, 2005

I really doubt you'll find anything like that. Who the hell that's organized and formal enough to use company letterhead is going to want anything to do with five-year-old machines?

Dear Legal:

The information you asked for will be difficult to gather, as the market for five year old computers is weak and largely informal. Currently, machines similar to this are selling for $PITTANCE on ebay.

Continuing to search for a firm willing to extend an offer or quote for such machines, on some sort of official letterhead, will cost far more in company resources and worker time than the expected value of the computers. I will continue to search for such information if directed, but you should be aware that this will, in all probability, reduce shareholder value.
posted by ROU_Xenophobe at 1:04 PM on April 14, 2005

I agree with caddis and ROU_Xenophobe here.

Do they want this for depreciation reasons? I worked with an accountant a number of years ago that wanted to depreciate (and replace) the computers on a seven year cycle.
posted by bh at 1:07 PM on April 14, 2005

Yeah, if accounting is writing off the PCs for taxes, they should have a depreciation table somewhere.
posted by falconred at 1:18 PM on April 14, 2005

I worked at Harvard Medical School and we had to explain the value of equipment if we donated it somewhere (I'm assuming for tax purposes). The guidelines at HMS were that computers had a 4 year useful life, so just take the original purchase price, divide it by 4 and subtract that amount for every year that you've had the machine. At this point a computer bought in 2000 would be value-less (at Harvard at least). Here's the page.
posted by SheIsMighty at 1:43 PM on April 14, 2005

FMV is generally lower than depreciated cost for PCs and such. If you account for assets on lower of cost or market basis, use Ebay, value the PC using this and work with the lower number. Your accounting policy for fixed assets may come into play. Don't be inconsistent unless you are willing to document that PCs lose value faster than other assets (that ain't hard). For tax purposes the IRS and other tax authorities like one method.
posted by nj_subgenius at 1:48 PM on April 14, 2005

Your accounting and finance group will have a depreciation plan for these purchases. Otherwise you will find that the fair market value of five year old computer equipment is negative: it will actually cost you money to have a reputable electronics recycler come to take it away. I'm sure you can contact your nearest computer recycling company -- my employer uses HMR Group -- and request a quote and formal statement to this effect.
posted by majick at 1:56 PM on April 14, 2005

majick: it will actually cost you money to have a reputable electronics recycler come to take it away.

I don't think so... A 1GHz PIII is worth about $75 CAD (retail value is about $150 CAD). Since the computers in question probably weren't top of the line when purchased that number might go down to $50. However, if you would like to pay me to take them away I will happily accept the money...
posted by Chuckles at 2:20 PM on April 14, 2005

"the fair market value of five year old computer equipment is negative"

I was thinking much the same, especially if you can't put XP on them.
posted by mischief at 2:50 PM on April 14, 2005

"A 1GHz PIII is worth about $75"

Maybe. If it were new, in a box, and carrying a warranty. These in question have seen five years of use, and is the kind of thing you dig out of dumpsters behind office buildings. I love old hardware but I would never pay actual money for a five year old commodity PC. Anyone who does so is paying unfair market value -- that is to say, they're being ripped off.
posted by majick at 4:59 PM on April 14, 2005

I would pay no more than $20 for a P3 1ghz, assuming at least the entire tower with keyboard, mouse, monitor and networking capability.
posted by Dean Keaton at 6:49 PM on April 14, 2005

Computers are classified as five year property by the IRS. At this point since they've been fully depreciated, the tax value is zero. Actually, if you decide to sell something after depreciating it, you'll owe capital gains taxes on it.
posted by Kellydamnit at 8:28 PM on April 14, 2005

That's just ridiculous, and I'm willing to put my money where my mouth is. I need two 1GHz PIIIs right now, socket or slot, I'll gladly pay Dean Keaton's $20 USD each for just the CPU + heatsink. I'll pay actual shipping too.
posted by Chuckles at 12:05 AM on April 15, 2005

IIRC, the IRS depreciation cycle for computers is five years. That combined with the doubling of performance every 18 months via Moore's law suggests that the computers in question are worth exactly zero.

In many cases, you can *increase* productivity by removing five-year-old computers from people's desktops. Even if you don't replace them with a new computer.

I could tell you more, but I'd have to bill you.

on preview, what Kellydamnit said.
posted by b1tr0t at 12:25 AM on April 15, 2005