How do you rate used furniture
Time Value of Furniture: How to Calculate It
Everyone who wants to buy or sell used furniture at some point wonders how much the piece of furniture is still worth. This question also arises very often in the event of an insurance claim.
One thing is certain: even after years, used furniture is still worth something. This time value of furniture can be calculated relatively precisely.
Time value of furniture: complicated formula, easy calculation
The time value of furniture can be calculated using a complicated looking formula. But don't let that put you off. The good thing about this formula is that although it may seem intimidating at first glance, it is actually very easy to calculate:
Current value = (replacement value - depreciation in the 1st year - depreciation in the following years) x remaining service life / (average service life - 1) + surcharge - discount
Calculating the current value of furniture: an example
Let us assume that Mr. Meier also wants to sell his walk-in built-in wardrobe when selling an apartment. For this he paid € 12,000. The cabinet is now 8 years old.
Mr. Meier would like to have € 5,000 for the wardrobe. Ms. Schmidt is interested in the cupboard, but finds this price far too excessive. With the above formula, the two can now determine who is right and how high the current value of the piece of furniture really is.
The replacement value of the wardrobe, which the manufacturer is still offering for sale, is now even € 15,000. The average lifespan of the piece of furniture is 20 years because it is a high quality piece of furniture.
Since it was used for 8 years, there is still a remaining service life of 12 years. Surcharges and discounts are waived. The depreciation in the 1st year of use is extremely high. It is 24% of the replacement value.
The result is the calculation: 24% of 15,000 = € 3,600
The decrease in value in the following years is 4%. This is because the piece of furniture has lost exactly 100% of its value after 20 years.
From this it follows: 4% of 15,000 = € 600
The wardrobe loses € 480 per year. Since the piece of furniture was used for a total of 9 years and the first year was charged extra, the 480 € must now be offset against the 8 following years:
600 x 7 = € 4,200
The calculation: current value of the piece of furniture
Now the values only have to be inserted into the formula.
Time value = (15,000 - 3,600 - 4,200) x 12 / (20 -1) = € 4,547.37
The piece of furniture still has a current value of € 4,547.37. Ms. Schmidt is accordingly right that Mr. Meier has overestimated the price of € 5,000 for the wardrobe used.
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