Agricultural marketing revolving fund

Valuation, depreciation and the rate base

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Multivolume work

Identifikator:: 1896404200

Document type:: Multivolume work

Title:: Encyklopädie der Rechtswissenschaft

Place of publication:: Leipzig

Publisher:: Duncker & Humblot [u.a.]

Year of publication:: 1904-

Collection:: Economics Books

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Volume

Identifikator:: 1896404219

URN:: urn:nbn:de:zbw-retromon-236878

Document type:: Volume

Title:: Encyklopädie der Rechtswissenschaft

Volume count:: Bd. 1

Place of publication:: Leipzig

Publisher:: Duncker & Humblot [u.a.]

Year of publication:: 1904

Scope:: 1114 S.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Multivolume work

Structure type:: Chapter

Title:: II. Zivilrecht

Collection:: Economics Books

POSSIBLE PROCEDURES IN FIXING RATES «3 Amortization During the Probable Life Term. — When only a single article is involved, as in the case of a steamboat, the disadvantage of adopting the plan of amortizing its cost or of providing a replacement fund in the exact term of its probable life is apparent. The steamboat may meet with an accident in the early years of its life. If it does and is replaced with a new one, amortization of the remaining value of the first steam- boat plus the amortization of the cost of the new steamboat will be necessary. The burden will fall upon the rate-payer. Under the alternative plan of continuing a uniform annual amortization allowance during the actual term of the steamboat’s service there will be no effect apparent upon the required earnings by an early failure of the steamboat. The loss of the first steam- boat will fall upon the owner, but, if rates are equitably estab- lished, the loss will be made good to him in the course of time by reason of the survival of other steamboats and the continu- ance of the depreciation or amortization allowance after original cost has been amortized. The wise plan is the one in which there is the least disturb- ance of the rates and in which, so far as may be, the required earnings will be least in the early years. The Book Accounts Under Various Methods of Procedure. — The book accounts relating to the foregoing tabular illustration when numerous articles all with a probable life new of 5 years are involved would show the following for each $100 of original investment: a. Sinking Fund Method with a replacement allowance for the term of the probable life of each article, regardless of the time of its actual failure. (Each article which replaces a fail- ing article is here treated as a new article.) Dr. side of Ledger Cr. side of Ledger 1st yr. To depr. or amort. allowance $17.74 By renewals $4.00 2nd yr. To int. on balance $13.74 0.82 To depr. or amort. allowance 18.45 By renewals 8.16 3rd =. To int. on balance 24.85 1.49 To depr. or amort. allowance 19.89 By renewals 12.65 4th yr. To int. on balance 33.58 2.01 To depr. or amort. allowance 22.13 By renewals 17.64 IJK

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