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Accounting & Distillery Equipment Depreciation


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Hello everyone,

I'm trying to determine what could be a reasonable accounting method to compute equipment depreciation and life expectancy when it comes to a distillery.

My accountant tells me that general equipment is usually treated using a declining balance method where 20% of the remaining cost is shaved each year from earnings. A linear method could also be used. But then he asked me, what is life expectancy of distillery equipment? Unlike a desktop computer which is worth next to nothing after 5 years, a pot still has a long life. Stainless steel tanks are still worth something after 50 years. Some other equipment has shorter life expectancy. That being said, all this equipment must be treated as a whole from an accounting perspective.

This may not sound sexy, but depreciation method and equipment life expectancy can have a significant impact on financial projection, so I'm curious to hear what methods and parameters distillery owners are using.



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Although I do not know the answer to your question I have worked extensively with a gentlemen that probably could answer your question. Jack Irvine at Irvine & CO is not only a CPA, he is a CPA that specializes in nothing but distilleries and wineries and he is incredibly skilled in these areas and I am sure he could assist in answering your questions should you wish to reach out to him. He can be contacted at 503-252-8449 or via email at jack@irvinecpas.com. Tell him I pointed you in his direction, we do a lot of work together. Best of luck on this and I am sure we would all be interested in hearing of the results.

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Thank for the tip, I contacted them and they replied quickly. Here's the essence of what they told me:

- When equipment is depreciated using a declining balance method this tends to not reflect the economic reality.

- For stainless type equipment, like stills, a life between 20 and 30 years is selected and it is depreciated straight line. While the stainless itself is still existing at 20-30 years, the equipment could be obsolete so 20-30 years is about the right life, generally.

- For the other equipment, we will often pick a 5-10 year life for each asset depending on what’s reasonable.
This makes a lot of sense to me.
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