Major Equipment Should Be Amortized

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Equipment Amortized

In accounting, there is a concept known as amortization. What it means is that every asset has an expected usable life. For example, a particular piece of equipment might be expected to last 20 years.

Every year, the cost of that particular piece of equipment is depreciated according to an amortization schedule, theoretically 1/20th of its value annually. So at the beginning of its expected lifetime, the piece of equipment would be its purchase price. And after 20 years it would be worth zero.

Pool Equipment Amortization

The major pieces of mechanical equipment in your pool also have a usable life. For pumps and filtering systems, it might be 10 years. For lighting systems, it could be 7 years. For heaters, perhaps 5 years, depending on the quality of the original equipment and the frequency of its use.

In this example, this means that at the end of 5 years you can expect to have to replace your heating system, at the end of 7 years your pool lighting, and at the end of 10 years, you probably will need a new pump and filters. While you may be able to get a little more or less usable life out of each of these systems, from a replacement perspective you should probably plan on replacement according to this estimated schedule.

Planned Obsolescence

Pool owners who amortize their major equipment are prepared for replacement costs when they occur. Those who don’t are often surprised by high bills when their equipment breaks down or fails.

Consult your owner’s manual or the manufacturer’s website for information about the expected usable life of your pool’s major equipment. Then create a repair, maintenance, and replacement schedule for your pool system.

Applying an accountant’s perspective to your pool maintenance and repair costs helps you plan for the future so you aren’t taken off guard by high replacement costs.

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