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

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter V. Elements which reduce value

Collection:: Economics Books

CHAPTER V ELEMENTS WHICH REDUCE VALUE Deductions from Value The Lessening of Worth. — The value of a property may in- crease or decrease with age. Having in the preceding chapter called attention to the essentials of value and to certain elements which add value, there will be considered briefly in this chapter some of the factors which reduce value. In the case of any operating plant there will be parts which deteriorate or wear out under the effect of continued use. By ordinary care the rate at which the perishable parts of a plant are consumed in rendering useful service is held at or near the average rate which experience teaches should be regarded as inevitable. If ordinary care is not exercised and a plant by reason of neglect gets into a condition which requires special attention to restore it to an average condition, all circumstances of use and age being considered, the prospective outlay to ac- complish this rehabilitation is called deferred maintenance. But even when there is no deferred maintenance there may have been a lessening of worth due to the fact that on account of wear and tear, or by reason of obsolescence, or inadequacy, or from any other cause, the time of probable serviceability of any article in question is being continually lessened. Loss of value from such cause is depreciation. Or again, if cost is made a starting point, it may be found that there is included unused property perhaps held to meet a future demand, but which, when valuations as a basis for rates are under consideration, may have to be omitted or deducted from the aggregate of the listed properties. And, finally, the property under considera- tion may include items designed of a capacity to meet future 79 4S

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