20 VALUATION, DEPRECIATION AND THE RATE-BASE
Remaining Value. — The term ‘‘ remaining value ” is equivalent
 in its meaning to present value when applied to an article
whose value lessens with age. It is generally dependent upon
and to be computed from three elements; (a) the probable useful
 life term of the article new; (b) its expectancy or probable
remaining term of usefulness; and (c) the cost of replacing it
with some article of equivalent usefulness, which, when prices
are not subject to change, is the original cost less the residual
value of the article when it goes out of use.
Residual Value. — The ¢ residual value” is the value which
remains in any article after the same has ceased to be useful
as an integral part of a public service or other property. The
residual value may be only scrap value, or it may be the price
at which it can be disposed of for use in connection with some
other property. It is usually estimated as the value to an outside
 purchaser, less the cost of delivery to such purchaser.
Condition Per Cent. — The existing condition of any article
can be expressed by comparison with the condition of the same
article new. If the article when new is taken at 1oo per cent
and present condition in comparison therewith is noted in per
cent this is called the condition per cent. It is the present or
remaining value in comparison with value new, based upon the
condition of the article, expressed in percentage.
Accrued Depreciation. — The accrued depreciation is the
difference expressed in money between the original cost of an
article and its remaining value.
Probable Life. — The probable life term of an article is the
time, usually expressed in years, during which it may reasonably
 be expected to render useful service. The probable life
term of any article is to be determined by the experience, the
world over, with other articles of the same kind. It depends
not alone upon the time required for an article to become valueless
 by use, by ordinary wear and tear, but also upon the time
when by reason of accidental destruction, inadequacy or obsolescence,
 the article must be replaced by a new one better adapted
to fulfill its purpose. If the life of a large number of articles of