Depreciation: Address Delivered Before the Convention of Central Water Works Association, Detroit, Mich., Sept. 25, 1912

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Railroad Commission of Wisconsin, 1912 - 43 páginas
 

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Página 25 - All moneys thus provided for shall be set aside out of the earnings and carried in a depreciation fund. The moneys in this fund may be expended in new constructions, extensions or additions to the property of such public utility, or invested, and if invested the income from the investments shall also be carried in the depreciation fund. This fund and the proceeds thereof shall be used for no other purpose than as provided in this section and for depreciation.
Página 5 - Commission shall from time to time ascertain and determine what are the proper and adequate rates of depreciation of the several classes of property of each public utility. The rates shall be such as will provide the amounts required over and above the expense of maintenance to keep such property in a state of efficiency...
Página 5 - ... state of efficiency corresponding to the progress of the industry. Each public utility shall conform its depreciation accounts to such rates so ascertained and determined by the commission. The commission may make changes in such rates of depreciation from time to time as it may find to be necessary. "2. The commission shall also prescribe rules, regulations, and forms of accounts regarding such depreciation which the public utility is required to carry into effect.
Página 5 - The commission shall ascertain and determine what are the proper and adequate rates of depreciation of the several classes of property of each public utility. The rates shall be such as will provide the amounts required over and above the expense of maintenance, to keep such property in a state of efficiency corresponding to the progress of the industry.
Página 26 - Every public utility shall carry a proper and adequate Depreciation Reserve to cover the full replacement of all tangible capital in service. There shall be opened a Depreciation Account to which shall be charged monthly, crediting the Depreciation Reserve, an amount equal to one-twelfth of the estimated annual depreciation of the tangible capital in service of the utility, or as near that amount as the finances of the property will permit.
Página 5 - The rates shall be such as will provide the amounts required over and above the expense of maintenance, to keep such property in a state of efficiency corresponding to the progress of the industry. Each public utility shall conform its depreciation accounts to such rates so ascertained and determined by the Commission. The Commission may make changes in such rates of depreciation from time to time as it may find to be necessary. "The Commission shall also prescribe rules, regulations, and forms of...
Página 32 - Class. Life. Cost of reproduction new. Scrap value. Cost new less scrap. Annual per cent reserved on 4 per cent basis.
Página 17 - Larger corporations, such as railways with thousands of miles of lines, and such as industrial enterprises with many plants', often appear to get along very well with repair or maintenance accounts alone. Their business is so extensive that renewals as they occur can be charged to repairs without seriously disturbing their net earnings. Owing to the very extent of their property, their renewal requirements are likely to be fairly regular from year to year.
Página 21 - This table also shows that the annual rate of depreciation varies from 20 per cent for the property in the five year group to 1.33 per cent for the property in the seventy-five year group. The average rate for all of these groups is 5.83 pe,r cent on the depreciable amount. * The straight line method is much more simple and direct than any of the other methods. It is advocated by the interstate commerce commission, .and for certain purposes also by the Wisconsin and other state commissions.
Página 7 - While expenses of this kind are in the nature of depreciation, they are, as a rule, not included in depreciation allowances but charged separately into the operating expenses. General decay is that part of wear and tear which is due to age and which cannot be made good through such ordinary repairs as those just described.

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