196 VALUATION, DEPRECIATION AND THE RATE-BASE 
If the Equal Annual Payment or the Straight Line Method 
of procedure has prevailed from the beginning and a 
continuance thereof is a certainty, the market value 
will be ascertained from the rate-base, column (13), 
determined from the investment less depreciation to 
which may be added something for value due to net 
earnings in excess of interest on the rate-base. 
Rate-base Determination. — When a rate-base is to be estab- 
lished, the totals of columns (ro) or (r3) will be used in com- 
bination with all or a part of any allowance for establishing the 
business and the cost of the ascertainable items of intangible 
character such as franchises and water-rights. The sum of 
these items with the total of column (10) will be the rate-base 
for the Unlimited Life Method and the Sinking Fund Method 
of procedure, and the sum of these items with the total of column 
(13) will be the rate-base for the Equal Annual Payment Method 
and the Straight Line Method of procedure. This is subject to 
the proviso that past history will show that accruing depre- 
ciation has actually been offset by earnings. Unless there has 
been a surplus in the earnings over a fair net return which is to 
be allowed on the investment, there will have been no amorti- 
zation, despite the fact that depreciation is obvious. The ac- 
crued depreciation as ascertained for any particular time does 
not always measure the amount of accomplished amortization. 
This is only the case when the allowance for depreciation, under 
these two methods of procedure, has actually been earned and 
has been collected.