Question

Why is it difficult to value assets, especially in a healthcare organization? How is valuation of a large machine like an MRI or CAT scan different from valuation of items such as medical supplies (i.e., sterile bandages, tape, etc.). What type of valuation method would you use for a large machine vs. smaller items?

Answer 1

Larger machines like MRI or CAT scan are put to constant use and their value keeps on depreciating with time. However, smaller items like medical supplies i.e. sterile bandages, tape can be put to use only once.

The valuation method that should be used for larger machines should be the market value at which those assets can be sold in the market. For items of medical supply, its cost should be used for valuation purpose.