DEFINITIONS y 
It is sometimes difficult to draw a close distinction between 
repairs and replacements and between deferred maintenance 
and accrued depreciation. It is generally assumed that deferred 
maintenance results from neglect to make the lesser repairs 
and renewals such as are current from year to year and that 
depreciation comes into consideration when dealing with the 
more important items which when new have a probable life of 
at least a number of years. 
Replacement Cost. — The replacement cost is the cost of a 
new article with which a worn-out article is replaced, less the 
residual value of the original article. It is the cost of effecting 
a change from the worn-out part of the property to a new part 
of equivalent service value. 
Invested Capital or Investment. — The investment or the 
capital invested hardly needs a definition. It is the aggre- 
gate of the expenditures which have been made and which re- 
main in the business. It is the summation of the cost of the 
various items which make up the property in question and render 
the same efficient for the purpose for which it is intended, less 
such sums as may have been applied out of earnings for the 
retirement of the capital. In connection with the valuation 
of public utility properties it may be regarded as the aggre- 
gate of the reasonable and proper expenditures which have 
been incurred to make these properties serviceable. It may 
and generally does include such items as the cost of establishing 
the business. 
Wearing or Service Value. — When the fact is taken into 
account that an article after it has ceased to be useful in con- 
nection with one enterprise or property may still have value in 
connection with another, and usually does have some scrap 
value, it will be plain that the lessening of worth is not to be 
estimated from the original full cost of the article. It is the 
difference between the first cost and the residual value which is 
being consumed during the useful life of the article. This dif- 
ference is frequently referred to as the wearing or service value 
of the article. 
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