Statictical characteristic of the obsolescence and physical depreciation
level of the standardized development objects that are in difficult geoclimatic conditions No Object type Useful life, Depreciation years rate 1 Public facilities 30 80% 2 Residential buildings 40-50 90% 3 Industrial buildings 30-40 70% 4 Farm buildings 40-50 50-65% Table 3.
Though it was clear that Adams was moving toward the application of economic depreciation and away from accounting for the physical depreciation
of the railroad equipment, he did seem to harbor the perspective that depreciation, though non-cash in nature, would provide a direct funding source for the replacement of equipment.
where ([Delta]) denotes a constant rate of physical depreciation
This takes into account the fact that depreciation should allow not only for physical depreciation
but also for functional obsolescence, economic obsolescence, and downward market fluctuations.
Accounting profit here is defined as the N PI market value, minus MVS replacement cost less physical depreciation
and functional obsolescence, divided by MVS replacement cost less physical depreciation
and functional obsolescence; it excludes those periods that suffered external obsolescence.
The physical depreciation
for the facility is $500,000.
The MM cost center is 20% physically depreciated and the NI cost center is brand new with no physical depreciation
and an economic remaining life less than the remaining economic life of the main structure.
If the permanent planting is truly the highest and best use of the land, the living planting may not experience physical depreciation
until it reaches maturity, although the ancillary infrastructure (irrigation and trellis systems) may begin to lose value from the moment of installation.
These costs new must then be reduced to reflect the remaining useful life of the subject property by deducting for physical depreciation
Because the kitchen is not new, physical depreciation
should be deducted.
The breakdown method of measuring accrued depreciation typically lists the causes in the following order: curable physical depreciation
, incurable physical depreciation
, curable functional obsolescence, incurable functional obsolescence, and external obsolescence.