Understanding the Valuation Tab: RCV, ACV, Tax, and Depreciation

Learn what each column in the Valuation tab means and how ContentsPal calculates Replacement Cost Value (RCV), Actual Cash Value (ACV), tax, and depreciation.

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Overview

The Valuation tab in ContentsPal displays the financial breakdown for each inventoried item, including replacement cost, depreciation, tax, and actual cash value. This article explains what each column means and how the calculations work.

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Key Columns Explained

Replacement Cost Value (RCV)

The RCV (shown in the Total (RCV) column) is the current retail price to purchase the item brand new, multiplied by the item’s quantity. This is the value that ContentsPal’s AI pricing engine determines based on market data. If your organization uses Quick Approve thresholds, items whose reported price is at or under the threshold are valued at the policyholder’s reported price instead.

Depreciation

Depreciation is the reduction in value based on the item’s age and the depreciation category assigned to it from the job’s depreciation table. It is expressed as a percentage (Dep. %) of the RCV, and the resulting Dep. Amount is subtracted to arrive at the ACV.

Tax

The Tax (@ RCV) column reflects the applicable sales tax on the replacement cost. Tax can be set in several ways:

• Job default tax rate — A single tax rate applied to all items on the job (set in the job’s Valuation Settings).

• State sales tax — The tax rate based on the state where the loss occurred. If the job’s address includes a US state and no rate has been set, that state’s rate is used automatically. Picking a state fills in its rate as the Tax %, which you can still adjust — the Tax % you save is the rate applied.

• Per-category tax rates — Optional rates for specific content categories that override the job rate for items in those categories.

RCV + Tax

This column shows the total replacement cost including tax:

RCV + Tax = Replacement Cost + Sales Tax

This represents the full amount it would cost the policyholder to replace the item at retail, including applicable taxes.

Actual Cash Value (ACV)

The ACV is the depreciated value of the item. The formula is:

ACV = (RCV + Tax) − Depreciation Amount, where Depreciation Amount = RCV × Depreciation %

Tax is calculated on the full replacement cost and kept in full, while depreciation is calculated on the RCV before tax and then subtracted. The rationale is that sales tax is incurred when purchasing the item new (at RCV), so the full tax amount is part of the value from which depreciation is subtracted.

Important: If no depreciation is applied to an item, ACV equals RCV + Tax. If there is also no tax, ACV would match the RCV value.

Why There Is No “ACV + Tax” Column

You may notice there is no separate “ACV + Tax” column. This is by design: tax is not typically applied to depreciated (ACV) values. Sales tax is only incurred at the point of purchase at full replacement cost. Since ACV represents a depreciated value (not a purchase price), adding tax on top of ACV would not reflect a real-world transaction.

The RCV + Tax column already captures the tax component, and it is factored into the ACV calculation as described above.

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Example Calculation

Item	RCV	Tax (6%)	RCV + Tax	Depreciation (20%)	ACV
Kitchen Mixer	$100.00	$6.00	$106.00	$20.00	$86.00

In this example:

• RCV = $100.00

• Tax at 6% = $6.00

• RCV + Tax = $106.00

• Depreciation at 20% of $100.00 = $20.00

• ACV = $106.00 − $20.00 = $86.00

Here is an example of the Valuation tab showing these columns:

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Setting the Tax Rate

To configure the tax rate for a job:

1. Open the job’s Valuation tab and click Options (or open the job’s settings, go to the Valuation tab, and click Open Valuation Settings…).

2. In the Tax & Dep. tab, find the Tax % field.

3. Enter the applicable rate (e.g., 6 for 6%) or pick a state under State (Sales Tax Lookup) to have ContentsPal fill in that state’s sales tax rate. Use Configure Per-Category Tax Rates… to set different rates for specific content categories.