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 II. Definitions

Collection:: Economics Books

20 VALUATION, DEPRECIATION AND THE RATE-BASE Remaining Value. — The term ‘‘ remaining value ” is equiva- lent in its meaning to present value when applied to an article whose value lessens with age. It is generally dependent upon and to be computed from three elements; (a) the probable use- ful life term of the article new; (b) its expectancy or probable remaining term of usefulness; and (c) the cost of replacing it with some article of equivalent usefulness, which, when prices are not subject to change, is the original cost less the residual value of the article when it goes out of use. Residual Value. — The ¢ residual value” is the value which remains in any article after the same has ceased to be useful as an integral part of a public service or other property. The residual value may be only scrap value, or it may be the price at which it can be disposed of for use in connection with some other property. It is usually estimated as the value to an out- side purchaser, less the cost of delivery to such purchaser. Condition Per Cent. — The existing condition of any article can be expressed by comparison with the condition of the same article new. If the article when new is taken at 1oo per cent and present condition in comparison therewith is noted in per cent this is called the condition per cent. It is the present or remaining value in comparison with value new, based upon the condition of the article, expressed in percentage. Accrued Depreciation. — The accrued depreciation is the difference expressed in money between the original cost of an article and its remaining value. Probable Life. — The probable life term of an article is the time, usually expressed in years, during which it may reason- ably be expected to render useful service. The probable life term of any article is to be determined by the experience, the world over, with other articles of the same kind. It depends not alone upon the time required for an article to become value- less by use, by ordinary wear and tear, but also upon the time when by reason of accidental destruction, inadequacy or obso- lescence, the article must be replaced by a new one better adapted to fulfill its purpose. If the life of a large number of articles of

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