How is used machinery to be valued?
Ans: Imports of used and second-hand machinery are more common in developing countries valuation of which can be problematic. Such machinery may be imported after purchase without any further use in between. In such cases the transaction value method can be applied. However. the machinery may have been further used after the last purchase or the declared value may be doubtful. It may not be possible to find values of identical or similar machines or to determine value by the deductive value method. In such cases the fallback method has to be applied in a manner consistent with the broad valuation principles. In some countries value is determined in such cases by allowing depreciation from the prices of new machinery for the period of use. At the same time appropriate additions are also made for any reconditioning done and fitments made in between.
