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

26 VALUATION, DEPRECIATION AND THE RATE-BASE Remaining Service Value. — The service value of an article which is no longer new is its remaining service value. It is determined from the original service value by deducting the accrued depreciation. Intangible Values. — The term intangible value is applied to any element of value other than elements of a physical na- ture. The value of a franchise is an intangible value, so too the “good-will” of a business; “going value;” rights of access; ” “ water-rights; 7 ¢ power-rights,” and the like. The cost of organizing and establishing a business is an element for consideration in making an appraisal of value just as legiti- mate as the cost of the physical elements of a property. Cost of Business Development or the Cost of Establishing the Business. — The cost of development or the cost of estab- lishing the business is a summation of the expenses not charge- able to construction which have been incurred in building up the business and bringing it upon a paying basis. Preliminary expenses, advertising, commissions and losses due to inade- quate revenue in the early years may all be brought under review in making up the cost of development. It is not always a simple matter to know where to stop in the matter of charg- ing up expenses to the cost of development and to the capital account. To a certain extent the losses due to deficient busi- ness in early years may be regarded as part of the capital reason- ably invested. The European practice is to do this to a far greater extent than is customary in the United States. When feasible, the better practice would be to recognize the early losses as a necessary incident to the business and to make pro- vision for their amortization as circumstances may justify. In general it may be said that any legitimate expense which it may be difficult to assign to construction or operating accounts can be regarded as development expense. Franchise. — A franchise is a privilege to do business granted by the public. A franchise may be limited to a specified period of time, it may be indeterminate or it may be perpetual. It may be, but is not necessarily, an exclusive privilege. It may

Access restriction

Copyright

fullscreen: Valuation, depreciation and the rate base

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation