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

50 VALUATION, DEPRECIATION AND THE RATE-BASE puted theoretical or geometrical quantities in all cases where the actual quantities are likely to be greater, the adoption of liberal rather than minimum prices for the various items of work, and a further allowance for contingencies. If the plans are in- complete, so that many minor features are omitted, he properly adds more for omissions and contingencies than where the plans are in greater detail. “In the valuation of a public service property, the same ideas should be kept in view and the percentage or sum to be allowed for contingencies should be governed, to a considerable extent, by the completeness of the inventory and the amount already allowed for omissions, by the extent to which additions have been made to the computed theoretical quantities and by the degree of liberality of the prices affixed to the various items of the inventory, but in no case should the contingencies be omitted or reduced to a small figure. Large contingent expenses are necessarily incurred in practically all important public works. They may occur from very many causes, among which may be enumerated the failure of contractors and the cost and legal expenses incident thereto; to the delay of certain parts of the work caused by such failure; to injunctions or to the inability to obtain possession of the land in due season, thereby necessi- tating the execution of such portions of the work under winter conditions or other adverse circumstances; to stringencies in the money market, causing a temporary shortage of funds, and a consequent disorganization of the forces employed on the work; to protracted strikes; to the necessity of rebuilding parts of the work which have failed because of improper design or unfore- seen causes; to making alterations found to be necessary or de- sirable after the work is built; to the slipping of earth or rock; and to making changes in plans which increase the cost of the work. “ Such contingent expenses as those above enumerated, with the exception of the last two, should be included as contingent expenses in any valuation of an existing property because the existence of the property does not give any clew to the amount of most of the contingent expenses involved in its creation.” Am. Soc. C. E. Committee, Insurance and Risk. — “There is an- other subject closely related to contingencies which may be classed as insurance or risk. For instance, if an owner of property is constructing a building he runs the risk that it may be burned. If a fire occurs when a building is nearly finished and the owner has to rebuild it, the cost of the completed structure, if he has

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