What is Equipment List?
The Short Answer
Equipment List explained simply
An Equipment List is a comprehensive inventory of all tangible assets a business possesses that are used to generate revenue. This includes everything from heavy machinery and vehicles to office furniture, computers, and specialized tools. Each item on the list should have details such as its description, model number, serial number, purchase date, original cost, estimated useful life, and current condition. This document is vital for understanding the true value of a business, especially during a sale, as it helps buyers assess the operational capacity and replacement costs of the assets.
Real-World Example
The Coffee Shop Equipment List
Imagine a coffee shop owner preparing to sell their business. Their Equipment List would include:
- Espresso Machine: La Marzocco Linea Mini, purchased 2020, original cost $5,500, excellent condition.
- Coffee Grinder: Mahlkönig EK43, purchased 2021, original cost $2,800, good condition.
- Refrigeration Unit: True T-49, purchased 2019, original cost $4,000, fair condition.
- POS System: Square Terminal, purchased 2022, original cost $300, excellent condition.
- Tables & Chairs: 10 sets, purchased 2018, original cost $2,000, good condition.
This list helps a potential buyer understand what physical assets they are acquiring and their current state, which impacts the business’s overall value.
Why this matters
An accurate Equipment List is important for several reasons. For sellers, it helps justify the asking price by showing the value of physical assets. For buyers, it provides clarity on what they are purchasing and helps them plan for future capital expenditures. It also plays a key role in securing financing, obtaining insurance, and managing depreciation for tax purposes.
Always keep your equipment list updated. It makes due diligence smoother and helps you get a fair price for your assets when you sell.
Always keep your equipment list updated. It makes due diligence smoother and helps you get a fair price for your assets when you sell.
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