Medical & Diagnostic Equipment Appraisal
Imaging, ultrasound, patient monitoring and therapeutic devices — valued for practice sales, partner separations, lending and insurance.
What actually drives value here
Medical equipment behaves differently from most capital equipment, and the differences are not intuitive. Two units of the same model and year can be worth materially different amounts, and the reasons are rarely visible in the physical inspection.
| Factor | Why it moves the number |
|---|---|
| Service contract transferability | A unit whose manufacturer service agreement transfers to a buyer is a different asset from one that does not. Where the contract dies on sale, the buyer prices in the cost and risk of re-establishing coverage. |
| Installed base of the model | Parts and qualified service follow the installed base. A model with many units in the field stays serviceable long after production ends; a model with few can become uneconomic to maintain while still working perfectly. |
| Refurbishment market depth | Where an active refurbisher market exists for a modality, there is a real floor under used values. Where it does not, the practical floor is scrap plus whatever the parts are worth. |
| Software and licence status | Capability that is licence-gated does not necessarily transfer with the hardware. Valuing an unlocked configuration when the licence stays with the seller overstates what the buyer receives. |
| Regulatory and registration status | A device's regulatory status affects who may lawfully buy, resell or place it back into service, which changes the size of the buyer pool. |
Model year is the factor most often over-weighted. It is a proxy for the things above, and a poor one: an older unit on a widely-installed platform with transferable service can be worth more than a newer unit on an orphaned one.
Practice sales and dissolutions
The two most common reasons this work is ordered are a practice changing hands and a practice coming apart. They ask different questions of the same equipment.
| Practice sale | Partner dissolution | |
|---|---|---|
| Premise usually sought | Fair market value in continued use | Depends on whether the practice continues or is wound up |
| Equipment's role | Part of an operating whole being transferred | An asset to be divided, bought out, or sold |
| Common error | Using a depreciation schedule as though it were a value | Assuming continued use when the practice is in fact being wound down |
| What the report must fix | The date and the definition | The date, the definition, and whether the going concern survives |
A depreciation schedule prepared for a tax return is not an appraisal. It records what was paid and how that cost has been recovered under a convention chosen for tax purposes. It does not answer what a buyer would pay, and it does not become an appraisal by being attached to a purchase agreement.
Where the equipment sits inside a larger question — what the whole practice is worth, not what the ultrasound is worth — that is a professional practice valuation, and the equipment schedule becomes one input to it rather than the answer.
A worked example
Illustrative arithmetic, not market data. Two identical units, same model, same year, same hours. Figures invented to show what the non-physical factors do.
| Unit A | Unit B | |
|---|---|---|
| Model and year | Identical | Identical |
| Physical condition | Identical | Identical |
| Service agreement | Transfers to buyer | Terminates on sale |
| Platform support | Large installed base, parts available | Manufacturer support ended, thin parts supply |
| Illustrative FMV in continued use | $100,000 | $54,000 |
Same machine on paper, same inspection findings, ~46% apart. An appraisal that inspects carefully and never asks about service transferability or platform support will report these two as equal.
Regulatory status, and why it changes the buyer pool
FDA's final guidance on remanufacturing of medical devices, published in the Federal Register on 10 May 2024, draws a line between servicing a device and remanufacturing it. Remanufacturing means processing, conditioning, renovating, repackaging, restoring or otherwise acting on a finished device in a way that significantly changes its performance or safety specifications, or its intended use.
The distinction has teeth. An entity that remanufactures carries manufacturer obligations: its own establishment registration and device listing, adverse event reporting, the Quality System regulation, and premarket authorisation where a modification significantly alters safety, performance or intended use. Labelling must clearly and conspicuously disclose the remanufacturer's name and address, the original manufacturer's, and the fact that the device was reconditioned or rebuilt.
For an appraisal, that is not a compliance footnote — it is a market-size fact. Where a unit can be refurbished and lawfully resold by entities that carry those obligations, there is a real secondary market and therefore a real floor. Where the work required to make a unit saleable would cross into remanufacturing and no party in the chain is willing to take on manufacturer status, the practical buyer pool narrows sharply, and the value follows it down.
This page does not advise on regulatory status, and an appraisal is not the document to rely on for it. What the appraisal does is state the assumption it has made about the device's status and disclose that the conclusion depends on it.
Data sources actually used
There is no single published price index for used medical equipment that an appraiser can simply consult, and any report implying otherwise should be read carefully. What is actually used is a combination, weighted and disclosed:
- Completed secondary-market transactions for the modality and platform, where they can be obtained and verified.
- Refurbisher and secondary dealer offerings, treated as asking prices rather than transactions and adjusted accordingly.
- Auction results from clearance and facility-closure sales, which carry a compelled-seller bias and inform liquidation premises rather than continued-use ones.
- Manufacturer and service-organisation input on platform support status, parts availability and contract transferability.
- Original cost and configuration records from the practice, used to identify what is actually installed — not as evidence of value.
Where the sample for a specific unit is thin, the report says so. A conclusion drawn from two verified comparables is not the same as one drawn from twenty, and the difference belongs in the report rather than in the appraiser's head.
Who orders it, and what it must contain
| Who orders it | Why | Premise usually required |
|---|---|---|
| Practice seller or buyer | Transaction, allocation of purchase price | Fair market value in continued use |
| Departing or remaining partner | Buy-out, dissolution | Depends on whether the practice continues |
| Lender | Equipment finance, refinancing | Orderly liquidation |
| Insurer or insured | Scheduling, or proving loss | Installed, or replacement cost per the policy |
| Court | Dissolution, damages | Set by the matter |
Development is governed by USPAP Standard 7 and reporting by Standard 8. The report identifies the client and intended users, states the intended use and the effective date, states the type and definition of value with its source, describes the scope of work, and discloses any extraordinary assumption relied upon — for example, an assumption that a service agreement will in fact transfer, where that has not been confirmed in writing.
Where an approach is not developed, the report says so and says why. A cost approach on a five-year-old imaging unit is a worked example of an approach that produces a number without producing information: reproduction cost new less depreciation can sit far above what any buyer in the secondary market would pay, because it prices the manufacture of the device rather than the demand for it. It is considered, and it is dismissed on the record rather than passed over.
That last point is the one that most often needs stating out loud. If transferability is assumed rather than verified, the assumption is load-bearing, and a report that does not disclose it is not merely thin. It is misleading about how much weight its own conclusion can carry.
Where this sits
Medical equipment is a lane inside machinery & equipment valuation. Where the question is the practice rather than the devices, see professional practice valuation; where a lender is taking the equipment as security, see loan collateral. Business owners and their advisers may find what we do for business and commercial clients the better starting point.
Jeremy C. Johnson, Arizona Certified Residential Real Estate Appraiser #21358 · AQB Certified USPAP Instructor.
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What the work actually looks like
Real assignments, client details removed — what each engagement actually turned on, rather than how it felt.
A house, a workshop of machine tools, a forty-year firearms collection and a stake in the family company — four disciplines that three appraisers had only partly covered. One engagement, one effective date, one set of assumptions.
A donation the regulations would have aggregated past the appraisal threshold, which the donor had assessed item by item. One qualified appraisal covering the group, itemized, signed inside the window the regulations allow.
An opposing report whose number was not obviously wrong — which is what made it dangerous. It failed on its own certification, and was answered section by section with an independent valuation to the correct definition of value.