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 XIII. The valuation of mines and oil properties

Collection:: Economics Books

248 VALUATION, DEPRECIATION AND THE RATE-BASE Valuation of Mines for Taxation in Various Localities In a general way some methods of valuing mining property for taxation purposes will now be outlined. Alabama, California, Towa, New Jersey, New York, Oregon, Washington, and West Virginia appraise mining property in a similar manner to real estate and other property. They have no laws pertaining to the valuation of mining property. This method requires a perfunctory valuation of the surface improve- ments and of the ore body, the latter in some cases being entirely ignored. Michigan, Minnesota and Wisconsin assess their mining prop- erties on a basis of the estimated value of the ore body and the surface improvements giving weight to all the elements that enter into value. In Michigan the present system was introduced by Mr. J. R. Finlay in 1911. Data are compiled from the reports of mine operators in sworn statements. Then an inspection is made by the State Geologist and his assistants to estimate the reserves and check up other data. The State Tax Commission passes on the figures and after a public hearing the final results are reported to the local assessors. The valuation is based on four elements — ore reserves (developed and prospective), average annual profits (five-year average), life or expectancy, and the rate of interest. The developed reserves consist of ore blocked out above the bottom levels. Prospective reserves con- sist of the expected extension of the ore bodies downward or laterally beyond existing workings. The average annual profits are estimated from a five-year record when such exists. Undeveloped properties are judged by the operations of other mines. The expectancy of a property is taken at the ratio of the estimated reserves to an average five-year shipment. The life of the undeveloped mines is estimated by comparison with adja- cent operations. The interest rate is now 6 per cent for both principal and sinking fund. It was 5 per cent and 4 per cent respectively in 1grr when Mr. Finlay had charge. The criti-

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