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

138 VALUATION, DEPRECIATION AND THE RATE-BASE The fact is evidently being recognized in Idaho as elsewhere, that the service rendered should always be zoo per cent good even though rendered by a plant whose physical parts are per- ishable and that if a roo per cent valuation for rate purposes is fair when the plant is new it is equally fair when the plant is old. Wisconsin Railroad Commission on Investment as the Rate- base. — The view which the author takes relating to making the necessary original cost and not “value »” the starting point when rates are to be fixed finds some support in the following statement by the Wisconsin R. R. Commission in the City of Appleton Case (Wis. R. C. R,, Vol. 5, p. 220). « For rate-making purposes the actual total investment, sub- ject to certain qualifications, seems to be the basis for deter- mining the reasonableness of the charges that may be exacted of the public for the services rendered or product furnished in certain jurisdictions. Of course where such information is not available, the reasonable value of the investment would have to be ascertained by some method of appraisement, and in such event the ¢ actual total investment’ doctrine would be inappli- cable.” Appraisals for Taxation Purposes The Taxation Value. — The tax value is usually intended to bear some definite relation to the market value. In some of the older Eastern cities of this country the tax value is intended to represent the full market value. Generally, however, this is not the case. Real estate will usually be found to be valued for taxation purposes at from so to 75 per cent of its market value and personal property sometimes still lower. The appraiser of tax values is therefore interested in market value and must give consideration to all the elements that go to establish market value, such as supply and demand, earning capacity present and prospective, rate of appreciation and the like. But this is a subject which is foreign to the purposes of this volume and may be dismissed with the above broad state- ment.

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