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That doesn’t actually change the cost of the policy. Repurposing an asset you spent $X to build is the same as spending $X on a new asset for that purpose, min

by zaroth 7y ago

That doesn’t actually change the cost of the policy. Repurposing an asset you spent $X to build is the same as spending $X on a new asset for that purpose, minus any depreciation you took up till that point. To your point, if road costs continue to be the status quo, then 1/4 of what you spent on roads should now be covered by bus fares. That would make the buses impossibly expensive. I’m sure that people who like riding public transit buses would love this policy, because your taking an already highly subsidized (loss leading) form of transportation and making it an order of magnitude more subsidized by giving them free private roads to ride on.

otterley 7y ago
Perhaps you have a different understanding of what “expensive” means than the generally accepted definition. Expensive generally refers to the outlay (the expense), not the income, or the net income, or any other financial metric. > repurposing an asset you spent $X to build is the same as spending $X on a new asset for that purpose Does GAAP agree with your claim?
- zaroth 7y ago
  Yes, GAAP accounting considers the payment for building the road as purchasing an asset. Cash account goes down, road assets go up. The depreciation expense for using the road accrues to whoever/whatever it is being used for. If you allocate roads exclusively for buses, buses need to cover the cost of maintaining the road. Today buses can’t even cover the cost of running the buses.
  - otterley 7y ago
    > Yes, GAAP accounting considers the payment for building the road as purchasing an asset. Cash account goes down, road assets go up. True. > The depreciation expense for using the road accrues to whoever/whatever it is being used for. False. Depreciation happens no matter what. The accountants don't care how it's used. The taxing entity may care if you want to obtain a deduction for the depreciating asset as a cost basis, but that's not an accounting question. > If you allocate roads exclusively for buses, buses need to cover the cost of maintaining the road. No they don't. Ideally, maybe; but that's a political question, not an accounting question.

by zaroth 7y ago

otterley 7y ago

Perhaps you have a different understanding of what “expensive” means than the generally accepted definition. Expensive generally refers to the outlay (the expense), not the income, or the net income, or any other financial metric. > repurposing an asset you spent $X to build is the same as spending $X on a new asset for that purpose Does GAAP agree with your claim?

zaroth 7y ago
Yes, GAAP accounting considers the payment for building the road as purchasing an asset. Cash account goes down, road assets go up. The depreciation expense for using the road accrues to whoever/whatever it is being used for. If you allocate roads exclusively for buses, buses need to cover the cost of maintaining the road. Today buses can’t even cover the cost of running the buses.
- otterley 7y ago
  > Yes, GAAP accounting considers the payment for building the road as purchasing an asset. Cash account goes down, road assets go up. True. > The depreciation expense for using the road accrues to whoever/whatever it is being used for. False. Depreciation happens no matter what. The accountants don't care how it's used. The taxing entity may care if you want to obtain a deduction for the depreciating asset as a cost basis, but that's not an accounting question. > If you allocate roads exclusively for buses, buses need to cover the cost of maintaining the road. No they don't. Ideally, maybe; but that's a political question, not an accounting question.