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Pages 100-118

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From page 100...
... Section 6.1 General Guidance explains the key concepts of asset depreciation and then describes the three approaches with examples of when and why each may approach. Section 6.2 Recommended Steps Section 6.3 Examples Section 6.4 Practice Assessment 6-1 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Depreciation, or loss of value over time, represents the conmost straightforward approach is to represent depreciation as a function of asset age using a simple linear relationship.
From page 101...
... Key Concepts (1) depreciation calculated over some period measures how much value of an asset a measure of how much closer an asset has moved toward the end of its useful life.
From page 102...
... Chapter 6. Depreciation / Section 6.1 General Guidance pattern of deterioration and a approach is best suited.
From page 103...
... Chapter 6. Depreciation / Section 6.1 General Guidance approach.
From page 104...
... Chapter 6. Depreciation / Section 6.1 General Guidance and what treatments may be needed.
From page 105...
... Chapter 6. Depreciation / Section 6.1 General Guidance proach is not recommended unless supported by additional analysis to verify next section.
From page 106...
... Chapter 6. Depreciation / Section 6.1 General Guidance where V(t0 )
From page 107...
... Chapter 6. Depreciation / Section 6.1 General Guidance compiled to calculate initial value.
From page 108...
... Chapter 6. Depreciation / Section 6.1 General Guidance or market value – then additional calculation of depreciation is not needed.
From page 109...
... Note that the steps presented here describe the case in which depreciation is calculated for an individual asset or component since the point at which the if a treatment was performed more recently than the time of the initial value an individual asset. scribed below.
From page 110...
... Chapter 6. Depreciation / Section 6.2 Recommended Steps 6-11 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Calculating Age-Based Depreciation Compile Data For each asset class and type of component being valued, compile the available data on the asset inventory and its age.
From page 111...
... Chapter 6. Depreciation / Section 6.2 Recommended Steps 6-12 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Calculating Condition-Based Depreciation set condition relates to age.
From page 112...
... Chapter 6. Depreciation / Section 6.2 Recommended Steps strictly upon an asset's condition then historic asset data is technically not parameters such as unit costs and useful lives)
From page 113...
... Chapter 6. Depreciation / Section 6.2 Recommended Steps 6-14 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Calculating Depreciation Establish the Depreciation Curve Determine the functional form of the depreciation curve based on the results linear depreciation.
From page 114...
... where V(t ) RV = residual value UL = useful life A(t)
From page 115...
... Chapter 6. Depreciation / Section 6.3 Examples Based on these assumptions the agency determines that a farebox depreciates by $5,000/15 = $333.33 per year until it reaches 15 years.
From page 116...
... Chapter 6. Depreciation / Section 6.3 Examples Figure 6-4.
From page 117...
... Chapter 6. Depreciation / Section 6.3 Examples pavement.
From page 118...
... between these two levels. Section 6.4 Practice Assessment Chapter 6.

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