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 established,
 the totals of columns (ro) or (r3) will be used in combination
 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 depreciation
 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 amortization,
 despite the fact that depreciation is obvious. The accrued
 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.