Total assets for a distillery

[Grossmiller]

Is there a standard depreciation percentage for Stills, Tanks, Barrels, Bottles, etc..? How well does the equipment hold its value? How much of an asset is the equipment? Thanks, Jason

[Grossmiller]

I am trying to write a business plan for an SBA loan and would like to find as many assets for the business as I can.

[ckrogstad]

Is there a standard depreciation percentage for Stills, Tanks, Barrels, Bottles, etc..? How well does the equipment hold its value? How much of an asset is the equipment? Thanks, Jason

I think most fixed assets in a brewery/winery/distillery are 10 year straight line.

Barrels? How long will you use them?

Bottles? These are inventory, and are not depreciated unless you do some crazy mark-to-market shit. Talk to your cpa before you do this tho.

equipment is an asset, until it is fully depreciated and has no book value, at which point you can, what is the term, lease-back?

[Paul G]

Is there a standard depreciation percentage for Stills, Tanks, Barrels, Bottles, etc..? How well does the equipment hold its value? How much of an asset is the equipment? Thanks, Jason

Warning: Just opinion here.

I think it's just off the beaten path enough that you might be able to fudge your numbers. Take into consideration how much YOU might want to pay for that 5 year old used still/fermenter/pump. Considering nominal wear and tear, or even deciding what "nominal" is in this industry (will the bank be able to refute your assertions?) it may be a lot of depreciation or virtually none.

Consider the nature of use of each item when considering depreciation. Stills - consider not only wear, but material value (scrap value of copper/stainless) Barrels - depending on use, may be used once or 3-4 times (and sell for $20 per half as garden planters when spent). Tanks and other vessels - perhaps check on some resellers' sites and find comparable items and gauge their cost used versus new and how old they are.

As previously mentioned, bottles and such, as inventory/consumables really aren't subject to depreciation. Although stockpiles that are unusable or unsold become a liability vs. an asset.

Hope it's some food for thought.

Cheers,

Paul

[Grossmiller]

Warning: Just opinion here.

I think it's just off the beaten path enough that you might be able to fudge your numbers. Take into consideration how much YOU might want to pay for that 5 year old used still/fermenter/pump. Considering nominal wear and tear, or even deciding what "nominal" is in this industry (will the bank be able to refute your assertions?) it may be a lot of depreciation or virtually none.

Consider the nature of use of each item when considering depreciation. Stills - consider not only wear, but material value (scrap value of copper/stainless) Barrels - depending on use, may be used once or 3-4 times (and sell for $20 per half as garden planters when spent). Tanks and other vessels - perhaps check on some resellers' sites and find comparable items and gauge their cost used versus new and how old they are.

As previously mentioned, bottles and such, as inventory/consumables really aren't subject to depreciation. Although stockpiles that are unusable or unsold become a liability vs. an asset.

Hope it's some food for thought.

Cheers,

Paul

Thank you, Paul. Just trying to add as many assets to the business as I can. Also thank you for approaching the question without prejudice. Jason

[Paul G]

...and of course an item's value may vary depending on whether you're appraising it for collateral or taxes