Valuation, depreciation and the rate base

Bibliographic data

Monograph

Identifikator:: 174667931X

URN:: urn:nbn:de:zbw-retromon-119897

Document type:: Monograph

Author:: Grunsky, Carl Ewald http://d-nb.info/gnd/10180959X

Title:: Valuation, depreciation and the rate base

Edition:: 2. ed., revised and extended

Place of publication:: New York

Publisher:: Wiley

Year of publication:: 1927

Scope:: X, 500 Seiten

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VII. The purpose of the appraisal

Collection:: Economics Books

134 VALUATION, DEPRECIATION AND THE RATE-BASE the opportunity for profit, of which he probably thought to avail himself when he bought a plant of depreciated value, and would place the rate-payer in the position of having made a profit at the expense of the original owner. This fact explains why the market value of stocks and bonds is cited so frequently as an indication of value. Improper Use of the Term * Value.” — It may be held that a determination of value for rate-fixing purposes, on the princi- ples herein set forth, is not a determination of value at all. This may be true, but it then becomes a matter of defining “ value,” as used by the courts in order that a distinction may be made between value and the appraisal of the investment on which rates may be properly based. The term ¢ value ” has been very generally used in matters involving the fixing of rates in the past. When fundamental principles are better understood, more attention will be paid to the capital reasonably and properly invested. Under a system of permitting the owner of public service properties to earn from year to year the actual average replace- ment requirements, the necessity for a close distinction between repair and replacement disappears. This is of some advantage, as it is at best difficult to discriminate between small items of replacement and large repair items. Basis of Rates in the Knoxville Case. — The United States Supreme Court in the Knoxville case Knoxville vs. Knoxville Water Co. (212 U. S. 1; 29 Sup. Ct. Rep. 148) says: “ A water plant, with all its additions, begins to depreciate in value from the moment of its use. Before coming to the ques- tion of profit at all the company is entitled to earn a sufficient sum annually to provide not only for current repairs, but for making good the depreciation and replacing the parts of the property when they come to the end of their life. The company is not bound to see its property gradually waste, without mak- ing provision out of earnings for its replacement. It is entitled to see that from earnings the value of the property invested is kept unimpaired, so that, at the end of any given term of years the original investment remains as it was at the beginning. It

Access restriction

Copyright

fullscreen: Valuation, depreciation and the rate base

Monograph

Chapter

Table of contents

Download

Monograph

This page

Image fragment

Citation links

Citation recommendation