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 IV. Essentials of value

Collection:: Economics Books

48 VALUATION, DEPRECIATION AND THE RATE-BASE and efficiently constructed necessarily involve a larger cost for engineering, which should be recognized in any valuation when the works give evidence of such skill and efficiency. “The cost of engineering for additions and extensions of a property may be as large, or even a larger percentage of the total cost than for the original plant, but under a continuous system of regulation engineering for additions and extensions, if charged to current expense, should not be included in the valua- tion. “It is sometimes suggested that no engineering charge should be made in the acquisition of real estate, and there may be some cases where such a view would be substantially correct. It is frequently the case, however, especially where strips of land are to be acquired, that the engineering cost is as great as for other portions of the work. “The record of the cost of the Wachusett Reservoir, where the engineers had little to do with the acquisition of land other than to prepare the plans of the lands and to make appraisals of the mill property and water-rights, amounted to about 3 per cent of the total cost of the property acquired. The per- centage would have been considerably larger if nearly all of the property had not been acquired by purchase and very little by condemnation proceedings. “The records of the New York Water-Works show that the engineering connected with the acquisition of land to the end of September, 1913, amounted to 1.87 per cent of the total expendi- tures on land account.” Am. Soc. C. E. Committee, General Expense. — The same committee in referring to general expenses says that these include: ‘ All administrative, legal and other general expenses during the period of construction. Such expenses include general office rent, the salaries of the officers of the corporation and of the secretary, treasurer, legal advisers, clerks and others. Statistics showing the amount of such expenses in the case of corporations are not available to the Committee. The statistics of munic- ipal public service properties throw some light upon the sub- ject, although generally defective in that the offices are fre- quently in public buildings where no rent is charged and the financial and legal duties are performed to a large extent by those who receive salaries paid out of general funds.

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