How do you value jewelry that you bought for scrap, then refurbished
for resale? I am going through a divorce and, like many others, have
a large inventory of jewelry I purchased as scrap. Now I need to
determine a value, but don't know how to approach this.
Anyone with ideas, please?
As you know, jewelry can have very divergent 'values'. There is
'fair market' value which means it is not worth any more than
someone is willing to give you for it. There is 'full retail'. what
is this? A mall is going toretail this piece far higher than the
same item in a small store. There is'insured value', often
insurance, with all its added fees and costs ofits own use higher
values just so the jeweler can afford to make or find another one.
Then there is scrap, this is just the 'FAST' value. All theseother
values can wait- from the eventual purchase to the eventual
replacement etc. The key in my mind is the 'fast' aspect. If you
want your money fast when in every other scenario you must wait,
then use the 'rocks and metal' value. This value disregards 'style'.
Style is what all the other values are dependent on.
In your situation of settling a divorce (similar to probate) I would
use scrap value.
Sorry about your divorce.
No expert here, but it seems logical to use the inventory value you
recordedusing the cost of materials. Your accountant (hopefully you
have one) should be a resource. My accountant told me to keep records
of the materials used and the amount received at sale of a piece. The
difference is profit, upon which your income tax is calculated.
Somehow expenses, depreciation, etc. are deducted to come up with
your final payment to IRS - I leave all that number-crunching to the
accountant! (I'm considering that you live in the USA)
When I use scrap in a piece, the materials' value has already been
'charged'to the original piece that produced the scrap and is
reflected in its inventory record of value. That means the scrap
piece has a lower value in the inventory record, because you can't
count the same thing twice. For example, a pair of earrings made
from the cut-outs left over from something else - the inventory
value is the cost of posts and earring backs because the cut-outs
value has already been accounted for in the original piece.
Your refurbished piece's value begins with the purchase price of the
scrap, plus the cost of any new material. Labor, overhead and profit
would make up the rest of the price you assign to the piece.
Lean on your accountant for advice, as every state and country has
differentrequirements. My condolences on the divorce. The process is
never easy. for anyone.
Judy in Kansas, where summer keeps on happening, but cooler weather
and rainshould bring relief soon.
How do you value jewelry that you bought for scrap, then
refurbished for resale? I am going through a divorce and, like many
others, have a large inventory of jewelry I purchased as scrap. Now
I need to determine a value, but don't know how to approach this.
So sorry to hear of your troubles Richard.
The scrap value would be what you paid for it - I don't see how you
could project a value. Refurbished pieces I suppose what you paid,
plus your time and expenses as they haven't sold as yet and in this
economy may not realize the price you expect for them.
Take your scrap/new/used jewellery to the local "Cash Converters" /
Pawnshop you will get the value you are looking fo for a divorce