RIB Depreciation

[Scrottocks]

What do you think is a fair rate of depreciation on a RIB?

Two years ago I bought a 1995 RIB/engine/trailer for about £5000 and I've spent a shedload of time and £2.5k repair money to add equipment, replace defective parts, upgrade, maintain, etc. My fishing mate kindly offered to share costs which he has done over the past two years and has more or less put in almost half the money (both capital and running costs - fuel, insurance, etc.).

Now he's going off sea-fishing and wishes to pull out and receive a share of the value of the boat.

Now, the question is how do I put a fair value on the capital cost, the extensive time and effort that I've put in, what annual depreciation to allow, etc?

Your advice would be appreciated!!

Thanks,

Arthur

[Poly]

Arthur, Firstly its always best to agree that sort of thing up front!

However there is a general rule of thumb which has been suggested which says a RIB depreciates at 10% per annum (and new boats lose their VAT as soon as it bought) . Its hugely subjective and obviously some boats age quicker than others / get more tlc than others etc. Generally I'd say don't expect to get back money spent on repairs maintainence - but obviously a complete retube does add value etc (but not as much as it costs!). Your time is certainly not worth anything I am afraid!

Assuming he bought half the boat 2 yrs ago, and the £2.5k actually was adding value then:

Value in 2009 = £7500
Value in 2010 = £6750
Value in 2011 = £6075
Value in 2012 = £5467

If he didn't pay any of the original purchase price (£5k) then I'd be suggesting that everything else was just running costs...