What is Asset Relifing?

Asset Relifing is a study that assigns a realistic and accurate life span for an asset. Our implementation results include increased operating margin, enhanced bond ratings, and lower insurance costs for our healthcare clients.

Why Relife Assets?

Hospitals and Health systems have utilized the lives assigned to assets by the American Hospital Association (AHA), which aimed to maximize the rate of depreciation expense due to the old Medicare cost reimbursement methodology.

These guidelines use shorter lifespans, which accelerate depreciation expense and reduce a hospital’s operating income.

Asset Relifing decreases depreciation expense and increases operating income. Downstream benefits can include, but are not limited to, improved bond ratings, lower insurance costs, and more accurate capital planning.

Our Process

Our process follows the traditional performance improvement methodology of assessment, implementation, and results. Unlike other performance improvement projects, our results are delivered and implemented within in a matter of months, with minimal time involvement from key stakeholders. To learn more about the stages of our process, please see below.

No Cost, No Commitment
We offer a complimentary assessment to determine the overall benefit to our potential clients.

Resources Required
We only require an Excel version of your fixed asset records to complete the assessment. Once the assessment is completed, we will review the results with your finance leadership team. Findings from the assessment are typically delivered in 5-7 business days upon receiving your fixed asset record.

Findings include

  • Estimated Annual Change in Depreciation Expense
  • Estimated Impact on Operating Margin
  • Estimated Professional Fee
  • Estimated Length of Implementation
  • Estimated Unrecorded Disposals

Our implementation process takes weeks to a few months depending on size and scope of agreed upon project. Regardless of its scope, each project follows our standard process:

Project Kickoff
This essential meeting aligns our Subject Matter Experts (SMEs) with client stakeholders to outline project objectives and timeframe.

On-Site Due Diligence
Our SMEs are on-site, verifying the existence and remaining useful life of assets that meet our required thresholds for the project.

Our SMEs utilize the results from on-site due diligence and the verification process to calculate and actualize the Relifing of assets.

Quality & Assurance
Our internal quality and assurance team reviews and verifies the results from SMEs’ findings.

Issuance of Draft Reports
Draft reports will be issued, reviewed, and discussed for purposes of approval by Client Finance leadership, Client auditor, and Principle Valuation leadership.

Final Reporting
Final reports, along with updated Excel schedules, will be issued to be uploaded into your fixed asset accounting system.


Our results have been reviewed and approved by the Big Four, regional, and community audit firms across the United States.

Our results do not require a restatement of financial statements, as they represent changes in estimates and can be applied retroactively as a full-year adjustment.


On average our clients realize a 20% to 30% reduction in annual depreciation expense, resulting in an increase of 20% to 25% in operating margin. Through due diligence we identify 5% to 15% of gross PP&E in unrecorded disposals which potentially lowers insurance costs and the average age of plant.


After the completion of every project, we provide a 5-year replacement cost analysis, providing our clients the most accurate strategic capital plan.

What are the Benefits of Asset Relifing?

Decrease in Depreciation Expense

On average our clients recognize a 20% to 30% reduction in annual depreciation expense

Improved Margins

On average our clients recognize an increase of 20% to 25% in operating margin

Lower Insurance Costs and Average of Plant

On average our clients recognize a 5% to 15% reduction in gross PP&E due to unrecorded disposals, resulting in a decrease in the average age of plant and insurance costs

Full Year of Benefit

Our results can be taken retroactively as a full-year benefit in the current fiscal year

Increased Borrowing Power

Depreciating assets too quickly can negatively impact the fair market value of a hospital and also make it more difficult for a hospital to borrow

Standardized Methodology

Our results generate a standardized methodology of depreciating assets across a system

Accurate Capital Planning

Through our five-year replacement cost analysis, operators are able to plan for capital purchases with greater accuracy.

Our Industry Experts

Principle Valuation is ready to serve you