{"id":6358,"date":"2022-07-25T12:59:56","date_gmt":"2022-07-25T10:59:56","guid":{"rendered":"https:\/\/www.sv-merker.de\/wiederbeschaffungswert-von-maschinen\/"},"modified":"2022-09-23T17:44:45","modified_gmt":"2022-09-23T15:44:45","slug":"replacement-value","status":"publish","type":"post","link":"https:\/\/www.sv-merker.de\/en\/replacement-value\/","title":{"rendered":"How to correctly apply and determine replacement values"},"content":{"rendered":"<div id='full_slider_1'  class='avia-fullwidth-slider main_color avia-shadow  av-small-hide av-mini-hide  avia-builder-el-0  el_before_av_section  avia-builder-el-first   container_wrap fullsize' style=' '  ><div   data-size='featured_large'  data-lightbox_size='large'  data-animation='fade'  data-conditional_play=''  data-ids='6285'  data-video_counter='0'  data-autoplay='true'  data-bg_slider='false'  data-slide_height=''  data-handle='av_slideshow_full'  data-interval='5'  data-class=' image_no_stretch'  data-el_id=''  data-css_id=''  data-scroll_down=''  data-control_layout='av-control-default'  data-custom_markup=''  data-perma_caption='aviaTBperma_caption'  data-autoplay_stopper=''  data-image_attachment=''  data-min_height='0px'  data-src=''  data-position='top left'  data-repeat='no-repeat'  data-attach='scroll'  data-stretch='image_no_stretch'  data-default-height='42'  class='avia-slideshow avia-slideshow-1  av-control-default av-default-height-applied avia-slideshow-featured_large av_slideshow_full  image_no_stretch avia-fade-slider '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\" ><ul class='avia-slideshow-inner ' style='padding-bottom: 42%;' ><li  class=' av-single-slide slide-1 ' ><div data-rel='slideshow-1' class='avia-slide-wrap '   ><img src='https:\/\/www.sv-merker.de\/wp-content\/uploads\/Blogbilder-PM-Header-9-1500x630.png' width='1500' height='630' title='Replacement value' alt='What is the replacement values of your machinery, plant and equipment?'  itemprop=\"thumbnailUrl\"   \/><\/div><\/li><\/ul><div class = \"caption_fullwidth av-slideshow-caption caption_left\"><div class = \"container caption_container\"><div class = \"slideshow_caption\"><div class = \"slideshow_inner_caption\"><div class = \"slideshow_align_caption\"><div class='avia-caption-content  '  itemprop=\"description\"  ><p>Do you know the replacement values of your machinery, plant and equipment? Find out why you need them and how they are determined here.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div>\n<div id='av_section_1'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-1  el_after_av_slideshow_full  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div  style='height:40px' class='hr hr-invisible   avia-builder-el-2  el_before_av_four_fifth  avia-builder-el-first '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-3  el_after_av_hr  el_before_av_four_fifth  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><p><div  style='padding-bottom:0px; ' class='av-special-heading av-special-heading-h1  blockquote modern-quote  avia-builder-el-4  el_before_av_textblock  avia-builder-el-first   av-mini-hide'><h1 class='av-special-heading-tag  av-mini-font-size-overwrite av-mini-font-size-24'  itemprop=\"headline\"  >How to correctly apply and determine replacement values<\/h1><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><p><em>26th of July 2022 by P. Merker<\/em><\/p>\n<h2><strong>What is it about?<\/strong><\/h2>\n<p>The replacement value is &#8211; in our opinion &#8211; one of the <strong><span style=\"color: #90111c;\">most interesting<\/span><\/strong> terms in valuation practice.<\/p>\n<p>The crux is that &#8211; depending on the economic context &#8211; replacement values can be quite <strong><span style=\"color: #90111c;\">different<\/span><\/strong>.<\/p>\n<p>Since it is generally always a good idea to clarify exactly what we are talking about (and in particular, of course, when preparing a valuation report), we would like to introduce the <strong><span style=\"color: #90111c;\">three most important concepts<\/span> <\/strong>below.<\/p>\n<p>These are<\/p>\n<ul>\n<li>the <strong><span style=\"color: #90111c;\">current value<\/span><\/strong>, as you know it from motor vehicle insurance<\/li>\n<li>the <strong><span style=\"color: #90111c;\">replacement cost<\/span><\/strong>, as used in business management<\/li>\n<li>the <strong><span style=\"color: #90111c;\">replacement value<\/span><\/strong> as used in business property insurance<\/li>\n<\/ul>\n<p>Furthermore, in our valuation practice we calculate current values and replacement values as a <strong><span style=\"color: #90111c;\">basis<\/span><\/strong> for determining <strong><span style=\"color: #90111c;\">fair market values<\/span><\/strong>, namely<\/p>\n<ul>\n<li>to check the <strong><span style=\"color: #90111c;\">plausibility<\/span><\/strong> of comparative values and<\/li>\n<li>if no comparative values exist, for example in the case of <strong><span style=\"color: #90111c;\">self-constructed<\/span><\/strong> machinery and equipment.<\/li>\n<\/ul>\n<blockquote>\n<p>If you are interested in how we proceed with machinery valuation, we recommend our article <span style=\"color: #90111c;\"><a style=\"color: #90111c;\" href=\"https:\/\/www.sv-merker.de\/en\/how-do-you-evaluate-machines\/\">&#8220;How to value machinery&#8221;<\/a>.<\/span><\/p>\n<\/blockquote>\n<\/div><\/section><\/p><\/div><div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-6  el_after_av_four_fifth  avia-builder-el-last  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>Table of content<\/strong><\/h2>\n<p><a href=\"#1\"><span style=\"color: #5f6062;\">What is the replacement value?<\/span><\/a><\/p>\n<p><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#2\">The current value<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#2\">Example car insurance<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#3\">Valuation of prototypes and self-constructed plants<\/a><\/span><\/p>\n<p><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#4\">The replacement value<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#4\">Business property insurance<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#5\">Excursus: reconstruction costs for real estate<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#6\">Determining fair market values on the basis of replacement values<\/a><\/span><\/p>\n<p><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#7\">Replacement costs<\/a><\/span><\/p>\n<p><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#8\">The replacement value in a practical test<\/a><\/span><\/p>\n<\/div><\/section><\/div><\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='1'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-8  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-9  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>What is the replacement value?<\/strong><\/h2>\n<blockquote>\n<p>Basically, the replacement value includes all costs that have to be spent in order to be able to replace a similar and equivalent item (machine, plant, operating equipment, etc.) at a certain point in time.<\/p>\n<\/blockquote>\n<h3>Similar, equivalent<\/h3>\n<p>It is clear from the wording (&#8220;similar and equivalent&#8221;) that it does <strong><span style=\"color: #90111c;\">not<\/span><\/strong> have to be the value of the same asset. In many cases it may no longer be possible to procure the same plant or machinery, for example because it is technically obsolete.<\/p>\n<h3>All costs<\/h3>\n<p>In addition to the purchase price, the replacement value also includes the necessary <strong><span style=\"color: #90111c;\">incidental costs.<\/span><\/strong><\/p>\n<p><strong><span style=\"color: #90111c;\">Time of replacement<\/span><\/strong><\/p>\n<p>Depending on the purpose for which the replacement value is determined, it may be in the <strong><span style=\"color: #90111c;\">present or in the future.<\/span><\/strong><\/p>\n<h3>Replacement value vs. current value<\/h3>\n<p>Also depending on the purpose of the valuation, it can be the replacement of an item that is as good as <strong><span style=\"color: #90111c;\">new<\/span><\/strong> (replacement value) or an item that has a <strong><span style=\"color: #90111c;\">current<\/span><\/strong> value. We will now come to this.<\/p>\n<h2><\/h2>\n<\/div><\/section><\/div>\n<\/p>\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='2'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-11  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-12  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section  av-mini-hide\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>The current value<\/strong><\/h2>\n<h3>Example of car insurance<\/h3>\n<p>You may be familiar with this value from your car insurance, because there it forms the basis for calculating the compensation you receive in the event of an accident, destruction or theft.<\/p>\n<p>Here it includes the amount you would have to pay for a car that corresponds to yours in make, model, equipment, year of manufacture, mileage and condition, i.e. equivalent and similar to your car, on the day of the damage.<\/p>\n<p>It is therefore not the value as new that matters, but the current value on the day of the damage, i.e. usually &#8220;as of today&#8221;.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='3'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-14  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-15  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>Valuation of prototypes and self-constructed plants<\/strong><\/h2>\n<p>The current value also plays a major role in our valuation practice, namely whenever we determine market values for machinery and equipment for which there is <strong><span style=\"color: #90111c;\">neither a second-hand market nor other comparative values.<\/span><\/strong><\/p>\n<p>This is always the case, for example, when prototypes or self-constructed plants are to be valued. In these cases, we usually only have information on the <strong><span style=\"color: #90111c;\">historical manufacturing costs<\/span><\/strong>.<\/p>\n<p>These then serve as a basis for us to determine the replacement value (see below for how this is done).<\/p>\n<p>In a next step, we assess the <strong><span style=\"color: #90111c;\">condition of the asset<\/span><\/strong> in order to be able to make appropriate deductions for use, if necessary. Then &#8211; depending on how long the plant has been in operation &#8211; the general <strong><span style=\"color: #90111c;\">depreciation<\/span><\/strong> is applied.<\/p>\n<p>This allows us to calculate a value that tells us at what cost a machine of this age and condition could be replaced &#8220;as of today&#8221; (i.e. on the valuation date).<\/p>\n<p>Incidentally, we often also determine this replacement time if there is a second-hand machinery market and corresponding comparative data in order to make the market values found in this way more plausible.<\/p>\n<p>It is important to include <strong><span style=\"color: #90111c;\">ancillary costs<\/span><\/strong>, such as foundations, without which the machine could not be operated at all.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='4'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-17  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-18  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section  av-mini-hide\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>The replacement value as new value<\/strong><\/h2>\n<h3>For business property insurance<\/h3>\n<p>In contrast to motor vehicle insurance, the replacement value plays the decisive role in business property insurance.<\/p>\n<p>This means that if you insure your company against fire, for example, you take out so-called <strong><span style=\"color: #90111c;\">replacement value insurance.<\/span><\/strong> For this, you need the replacement costs of your machinery and equipment at replacement value and &#8220;as of today&#8221;, i.e. at the current valuation date.<\/p>\n<blockquote>\n<p>The replacement value includes the costs at which a machine or plant could be procured in a new and impeccable condition.<\/p>\n<\/blockquote>\n<p>The <strong><span style=\"color: #90111c;\">sum insured<\/span><\/strong> is then formed from the values as new. For property insurance, the value as new therefore also includes <strong><span style=\"color: #90111c;\">freight, packaging and assembly<\/span><\/strong>, because the aim of property insurance is to have the equipment ready for operation as quickly as possible.<\/p>\n<p>In certain cases, however, it is also possible and makes sense to insure machinery, plant or equipment at <strong><span style=\"color: #90111c;\">current value<\/span><\/strong>.<\/p>\n<p>Ideally, the replacement value is adjusted annually so that the sum insured is always correct.<\/p>\n<p>The correct determination of replacement values for property insurance is very important both for operational safety and for the operational wallet.<\/p>\n<blockquote>\n<p>Read our article <a href=\"https:\/\/www.sv-merker.de\/en\/machine-insurance\/\">&#8220;The correct sum insured in business property insurance&#8221;<\/a> and do the <a href=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Checklist-Insurance-Sum.pdf\">&#8220;Quickcheck sum insured&#8221;<\/a>.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='5'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-20  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-21  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>Excursus: Reconstruction costs for real estate<\/strong><\/h2>\n<p>In the case of <strong><span style=\"color: #90111c;\">commercial buildings<\/span><\/strong>, especially if they have been in use for several years and the sum insured was determined at the time on the <strong><span style=\"color: #90111c;\">basis of the new construction costs<\/span><\/strong>, the <strong><span style=\"color: #90111c;\">sum insured<\/span><\/strong> should also be regularly adjusted. For this purpose, the &#8220;real estate equivalent&#8221; to the replacement values, the <strong><span style=\"color: #90111c;\">restoration costs<\/span><\/strong>, is determined.<\/p>\n<p>The calculation is made on the basis of quality and cost ratios and takes into account the development of the construction price index.<\/p>\n<p>A big crux here is the distinction between buildings and furnishings, because very specific rules apply here for the insurance.<\/p>\n<blockquote>\n<p>For example: passenger lifts are part of the building, goods lifts are part of the operating equipment.<\/p>\n<\/blockquote>\n<p>This is why we prepare <strong><span style=\"color: #90111c;\">insurance<\/span> <span style=\"color: #90111c;\">appraisals<\/span><\/strong> for companies on request for buildings and facilities <strong><span style=\"color: #90111c;\">&#8220;from a single source&#8221;<\/span><\/strong> together with our colleagues from <a href=\"http:\/\/wagnerundpartner.de\" target=\"_blank\" rel=\"noopener\"><strong><span style=\"color: #90111c;\">Wagner und Partner Immobilienbewertung<\/span><\/strong><\/a>, because this way we can ensure that nothing is recorded twice or forgotten.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='6'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-23  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-24  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>Determining fair market values on the basis of replacement values<\/strong><\/h2>\n<p>We have already explained above that in certain cases we derive market values on the basis of current values.<\/p>\n<p>To determine the current values, we in turn need the replacement values. We derive these (if we have nothing else) from the historical acquisition and production costs.<\/p>\n<p>We use this procedure in particular for the valuation of prototypes and self-constructed plant and machinery. We proceed as follows:<\/p>\n<ul>\n<li>All cost blocks for the creation of the machine are clustered according to the applicable index series and according to the time of their contribution. These are, for example, the personnel costs, machine hours and material costs. Depending on the machine, this can be several dozen clusters!<\/li>\n<li>Then, in a first step, we extrapolate the values to the time when the machine was first put into operation and, in a second step, to the valuation date. This gives us the replacement value. From this we then calculate &#8211; as already described &#8211; the current value.<\/li>\n<\/ul>\n<p>The following chart illustrates the entire way we use replacement values to arrive at fair market values for such specialities as self-constructed machinery and equipment.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-6376 aligncenter\" src=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value-810x1030.png\" alt=\"Replacement value and fair value\" width=\"538\" height=\"684\" srcset=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value-810x1030.png 810w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value-236x300.png 236w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value-768x977.png 768w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value-1208x1536.png 1208w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value-1610x2048.png 1610w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value-1179x1500.png 1179w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value-554x705.png 554w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Replacement-value.png 1755w\" sizes=\"auto, (max-width: 538px) 100vw, 538px\" \/><\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='7'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-26  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-27  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>Replacement costs<\/strong><\/h2>\n<p>In business administration, replacement costs are determined in order to enable the so-called <strong><span style=\"color: #90111c;\">&#8220;output-equivalent&#8221; replacement<\/span><\/strong> of an asset at a later date.<\/p>\n<p>In this case, replacement values are determined that lie in the <strong><span style=\"color: #90111c;\">future<\/span><\/strong>.<\/p>\n<p>The following considerations play a role:<\/p>\n<h3>Price increases:<\/h3>\n<p>In your company balance sheet you will usually find the acquisition and production costs at <strong><span style=\"color: #90111c;\">historical prices<\/span><\/strong>. However, <strong><span style=\"color: #90111c;\">price increases and inflation<\/span><\/strong> will lead to the fact (probably no one needs to convince us of this at present) that a higher amount of money will have to be spent at the time of replacement.<\/p>\n<h3>Technological progress:<\/h3>\n<p>At the time of the replacement investment, you will probably use equipment of the then current state of technology in order to remain competitive. However, next generation equipment may be more expensive &#8211; but it may also be cheaper. So you may consider an innovation factor in the replacement.<\/p>\n<h3>Economic life:<\/h3>\n<p>Legally permissible depreciation methods and useful lives are often not identical with the actual wear and tear of machinery and equipment &#8211; neither in terms of amount nor over time. This means that in order to ensure the substance of a business, calculate the <strong><span style=\"color: #90111c;\">depreciation<\/span><\/strong> of the projected replacement costs <strong><span style=\"color: #90111c;\">according to the actual circumstances.<\/span><\/strong><\/p>\n<p>To determine the replacement costs for the purpose of preserving the <strong><span style=\"color: #90111c;\">substance of an enterprise<\/span><\/strong>, you therefore proceed as follows:<\/p>\n<ul>\n<li>you determine the time of the replacement investment.<\/li>\n<li>you forecast the price increase (probably currently one of the greatest challenges) and the influence of technological progress on the price.<\/li>\n<\/ul>\n<p>These replacement values also take into account the necessary ancillary costs.<\/p>\n<p>The relationship can be well illustrated by the following graph:<\/p>\n<p><br class=\"avia-permanent-lb\" \/><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-6379 size-large\" src=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/replacement-value-2-1030x655.png\" alt=\"Replacement value\" width=\"1030\" height=\"655\" srcset=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/replacement-value-2-1030x655.png 1030w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/replacement-value-2-300x191.png 300w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/replacement-value-2-768x488.png 768w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/replacement-value-2-1536x976.png 1536w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/replacement-value-2-2048x1302.png 2048w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/replacement-value-2-1500x954.png 1500w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/replacement-value-2-705x448.png 705w\" sizes=\"auto, (max-width: 1030px) 100vw, 1030px\" \/><\/p>\n<\/div><\/section><\/div><\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='8'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-29  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-30  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><strong>All theory is grey &#8211; the replacement value in a practical test<\/strong><\/h2>\n<p>Why we are dealing with replacement value now of all times has a bit of a back story.<\/p>\n<p>When we recently moved our office from the Colonnaden to M\u00f6nckebergstra\u00dfe, I was packing boxes when I came across the beautiful, old, robust industrial stapler for round wire staples, model Elastic No. 53 by Schlemming.<\/p>\n<p>My grandfather, who founded our surveyor&#8217;s office in the 1950s, had bought this in the early 1960s.<\/p>\n<p>I thought of my grandfather and how great he thought it was that the office was now in its third generation. And then I thought (occupational disease!) how this super stapler would be valued today&#8230;<\/p>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-large wp-image-6315\" style=\"font-size: 16px;\" src=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/IMG_3817-1030x773.jpeg\" alt=\"Praxibeispiel Wiederbeschaffungswerte\" width=\"1030\" height=\"773\" srcset=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/IMG_3817-1030x773.jpeg 1030w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/IMG_3817-300x225.jpeg 300w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/IMG_3817-768x576.jpeg 768w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/IMG_3817-1536x1152.jpeg 1536w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/IMG_3817-2048x1536.jpeg 2048w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/IMG_3817-1500x1125.jpeg 1500w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/IMG_3817-705x529.jpeg 705w\" sizes=\"auto, (max-width: 1030px) 100vw, 1030px\" \/><\/h2>\n<p><em>This is the industrial plier stapler for round wire staples, model Elastic No. 53 from around 1960. I haven&#8217;t the faintest idea what the historical acquisition costs were.<\/em><\/p>\n<p>A little research: The unit is still being manufactured and sold for \u20ac387.52. This gives us an impressive replacement value.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-6317\" src=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.34.32.png\" alt=\"Praxibeispiel Wiederbeschaffungswerte\" width=\"753\" height=\"391\" srcset=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.34.32.png 753w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.34.32-300x156.png 300w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.34.32-705x366.png 705w\" sizes=\"auto, (max-width: 753px) 100vw, 753px\" \/><\/p>\n<p>You can get a Simplex A stapling plier for less than 100 \u20ac per piece, i.e. for just under a quarter. You can also use them to staple size 53 staples in your documents. On the other hand, we have the task of assessing similarity and equivalence.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-6313\" src=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.54.28.png\" alt=\"Praxibeispiel Wiederbeschaffungswerte\" width=\"832\" height=\"546\" srcset=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.54.28.png 832w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.54.28-300x197.png 300w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.54.28-768x504.png 768w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.54.28-705x463.png 705w\" sizes=\"auto, (max-width: 832px) 100vw, 832px\" \/><\/p>\n<p>This Ebay offer for 17 \u20ac (the year of the offer is unknown) could be used as a basis for a current value. However, the device has probably not found a buyer for this price. Therefore, we would be very cautious in deriving a fair market value.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-large wp-image-6319\" src=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.42.29-1030x334.png\" alt=\"Praxibeispiel Wiederbeschaffungswerte\" width=\"1030\" height=\"334\" srcset=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.42.29-1030x334.png 1030w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.42.29-300x97.png 300w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.42.29-768x249.png 768w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.42.29-705x228.png 705w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/Bildschirmfoto-2022-07-24-um-19.42.29.png 1367w\" sizes=\"auto, (max-width: 1030px) 100vw, 1030px\" \/><\/p>\n<blockquote>\n<p>Which ultimately brings us to the most beautiful of all values, which defies all reason:\u00a0 The value of love, for things that are irreplaceable and priceless.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n<\/p>\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='6'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-32  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div  style='height:100px' class='hr hr-invisible   avia-builder-el-33  el_before_av_one_fourth  avia-builder-el-first '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_fourth  flex_column_div av-zero-column-padding first  avia-builder-el-34  el_after_av_hr  el_before_av_three_fourth  \" style='border-radius:0px; '><div  class='avia-image-container  av-styling-circle    avia-builder-el-35  avia-builder-el-no-sibling  avia-align-center '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><div class='avia-image-overlay-wrap'><img class='avia_image' src='https:\/\/www.sv-merker.de\/wp-content\/uploads\/Ohne-Titel-1000-x-1500-px-2-300x300.png' alt='Philip Merker Expert for the appraisal of machinery and technical equipment' title='Philip Merker  Expert for the appraisal of machinery and technical equipment' height=\"300\" width=\"300\"  itemprop=\"thumbnailUrl\"  \/><\/div><\/div><\/div><\/div><div class=\"flex_column av_three_fourth  flex_column_div av-zero-column-padding   avia-builder-el-36  el_after_av_one_fourth  el_before_av_hr  \" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Philip Merker, MBA<\/p>\n<div>\n<div>\n<div>\n<h2><a href=\"https:\/\/www.sv-merker.de\/en\/\">Merker Industriebewertungen<\/a><\/h2>\n<\/div>\n<section>\n<div>\n<p>Certified expert for the evaluation of machinery and technical equipment (DIN EN ISO \/ IEC 17024)<\/p>\n<p>Telephon +49 40 602 13 33<br \/>\n<a href=\"https:\/\/www.sv-merker.de\/en\/contact\/#contactform\">Email \u00adinfo@sv-merker.de<\/a><\/p>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div><\/section><\/div><div  style='height:100px' class='hr hr-invisible   avia-builder-el-38  el_after_av_three_fourth  avia-builder-el-last '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='av_section_11'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-39  el_after_av_section  avia-builder-el-last   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-6358'><div class='entry-content-wrapper clearfix'>\n<div  style='height:30px' class='hr hr-invisible   avia-builder-el-40  el_before_av_one_full  avia-builder-el-first '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_full  flex_column_div av-zero-column-padding first  avia-builder-el-41  el_after_av_hr  el_before_av_hr  \" style='border-radius:0px; '><\/div><div  style='height:10px' class='hr hr-invisible   avia-builder-el-43  el_after_av_one_full  avia-builder-el-last '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":5,"featured_media":6292,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-6358","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/posts\/6358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/comments?post=6358"}],"version-history":[{"count":11,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/posts\/6358\/revisions"}],"predecessor-version":[{"id":6494,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/posts\/6358\/revisions\/6494"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/media\/6292"}],"wp:attachment":[{"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/media?parent=6358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/categories?post=6358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/tags?post=6358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}