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

70 VALUATION, DEPRECIATION AND THE RATE-BASE capitalization of any franchise or the right to own, operate or enjoy any franchise whatsoever in excess of the amount (ex- clusive of any tax or annual charge) actually paid to the State or to a political subdivision thereof as the consideration for the grant of such franchise.” Appreciation and the Unearned Increment Earnings Affect Value. — The earning power of a property determines its value. As its net earnings increase, its value in- creases. The earning power of public utilities, as a general rule, if rates remain undisturbed, increases as population density in- creases although not in the same ratio. The appreciation or increase of value which results when net earnings, in their rela- tion to the investment, are increasing is the reverse of depre- ciation, but it follows no definite law and it cannot be forecast with that degree of certainty which can, with some reason, be claimed for depreciation. The Unearned Increment. — Appreciation or increase of value without increase of investment is the unearned increment which results from the changing conditions of environment. Usefulness in service does not always decrease, but may increase with age. This may be the case with a dam or with a railway embankment, and this increase of usefulness when it can be ex- pressed in terms of money, or value in exchange, represents appreciation. Increase in the price of labor and materials, or a change in the conditions under which an enterprise was first established, may add to or may take from its value according to whether it would be more or less expensive to construct and establish the same enterprise under the altered conditions. As a general proposition, it may be stated that values as ex- pressed in terms of money are increasing. It is also true that, as a general rule, public utilities are to be included among the principal factors which are responsible for the growth of the community, and that, when viewed in this light, the owner of the utility is entitled to participate in the unearned increment

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