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.
Key Columns Explained
Replacement Cost Value (RCV)
The RCV is the current retail price to purchase the item brand new. This is the value that ContentsPal's AI pricing engine determines based on market data.
Depreciation
Depreciation is the reduction in value based on the item's age, condition, and expected useful life. It is typically expressed as a percentage and subtracted from the replacement cost to arrive at the ACV.
Tax
The Tax column reflects the applicable sales tax on the replacement cost. Tax can be set in two ways:
Job default tax rate — A single tax rate applied to all items on the job (set in job settings).
State sales tax — The tax rate based on the state where the loss occurred.
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
Tax is applied to the full replacement cost before depreciation is subtracted. The rationale is that sales tax is incurred when purchasing the item new (at RCV), so it should be part of the base value from which depreciation is calculated.
Important: If no depreciation is applied to an item, ACV equals RCV. In this case, 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.
Example Calculation
Item | RCV | Tax (6%) | RCV + Tax | Depreciation (20%) | ACV |
Kitchen Mixer | $100.00 | $6.00 | $106.00 | $21.20 | $84.80 |
In this example:
RCV = $100.00
Tax at 6% = $6.00
RCV + Tax = $106.00
Depreciation at 20% of $106.00 = $21.20
ACV = $106.00 − $21.20 = $84.80
Here is an example of the Valuation tab showing these columns:
Setting the Tax Rate
To configure the tax rate for a job:
Open the job and go to Job Settings.
Find the Tax Rate field.
Enter the applicable rate (e.g.,
6for 6%) or select Use state sales tax to have ContentsPal automatically apply the correct rate based on the loss location.