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I'm not an accountant, and I don't know how the Pentagon approaches depreciation schedules, but most examples I've seen in general descriptions have annualized

I'm not an accountant, and I don't know how the Pentagon approaches depreciation schedules, but most examples I've seen in general descriptions have annualized rates much higher than inflation. Also, some methods have a final period over which the the depreciation is 100% of the remaining value, which can't be offset by any amount of inflation.

MichaelZuo 3y ago
How can 100% of the value be depreciated? Scrap value is worth more than zero.
- KptMarchewa 3y ago
  Because you can have to pay more for proper decomissioning than any raw materials worth. You don't want to sell working explosives (or, nukes) to random scrap yards but make sure they aren't working.
  - MichaelZuo 3y ago
    So then it seems like it should have negative value instead of zero. It's extremely unlikely for it to perfectly cancel out at 0.
- sammywater 3y ago
  Depreciation isn't based on realistic estimates. They're standards issued by a governing body to try and capture some expense of the reality of depreciation. For example, there's not a Dodge minivan vs Honda minivan depreciation difference, even though, if you've had both, you know one depreciates much faster than the other. In the example below, it says 5 years for furniture. Is all furniture worthless after 5 years? Of course not. There's an entire industry of centuries old antiques. "Depreciation is a non-cash business expense that is allocated and calculated over the period that an asset is useful to your business." You ask How? More info here: "Depreciation Concepts" - https://www.principlesofaccounting.com/chapter-10/depreciation-concepts/ https://www.principlesofaccounting.com/chapter-10/depreciati... example: https://www.myaccountingcourse.com/accounting-dictionary/images/depreciation-schedule-example.jpg https://www.myaccountingcourse.com/accounting-dictionary/ima... source: https://www.myaccountingcourse.com/accounting-dictionary/depreciation-schedule https://www.myaccountingcourse.com/accounting-dictionary/dep...
  - MichaelZuo 3y ago
    By these standards the pentagon will have sent $0 worth of stuff to Ukraine?
- someotherperson 3y ago
  Not an accountant, might have issues: There are depreciation schedules in taxation that let you offset your tax. To this effect, 100% depreciation would expense the item (and thus reduce the taxable income). Because the tax doesn't represent 100% of the value you paid for the item, it doesn't mean that the item no longer with value.
- johngladtj 3y ago
  Any scrap value you realize is recorded as profit
- whinenot 3y ago
  Scrap has storage and disposal costs, especially for things that go boom. Giving old war machines and ordnance away is probably a huge expense reduction for all NATO donor countries.

MichaelZuo 3y ago

How can 100% of the value be depreciated? Scrap value is worth more than zero.

KptMarchewa 3y ago
Because you can have to pay more for proper decomissioning than any raw materials worth. You don't want to sell working explosives (or, nukes) to random scrap yards but make sure they aren't working.
- MichaelZuo 3y ago
  So then it seems like it should have negative value instead of zero. It's extremely unlikely for it to perfectly cancel out at 0.
sammywater 3y ago
Depreciation isn't based on realistic estimates. They're standards issued by a governing body to try and capture some expense of the reality of depreciation. For example, there's not a Dodge minivan vs Honda minivan depreciation difference, even though, if you've had both, you know one depreciates much faster than the other. In the example below, it says 5 years for furniture. Is all furniture worthless after 5 years? Of course not. There's an entire industry of centuries old antiques. "Depreciation is a non-cash business expense that is allocated and calculated over the period that an asset is useful to your business." You ask How? More info here: "Depreciation Concepts" - https://www.principlesofaccounting.com/chapter-10/depreciation-concepts/ https://www.principlesofaccounting.com/chapter-10/depreciati... example: https://www.myaccountingcourse.com/accounting-dictionary/images/depreciation-schedule-example.jpg https://www.myaccountingcourse.com/accounting-dictionary/ima... source: https://www.myaccountingcourse.com/accounting-dictionary/depreciation-schedule https://www.myaccountingcourse.com/accounting-dictionary/dep...
- MichaelZuo 3y ago
  By these standards the pentagon will have sent $0 worth of stuff to Ukraine?
someotherperson 3y ago
Not an accountant, might have issues: There are depreciation schedules in taxation that let you offset your tax. To this effect, 100% depreciation would expense the item (and thus reduce the taxable income). Because the tax doesn't represent 100% of the value you paid for the item, it doesn't mean that the item no longer with value.
johngladtj 3y ago
Any scrap value you realize is recorded as profit
whinenot 3y ago
Scrap has storage and disposal costs, especially for things that go boom. Giving old war machines and ordnance away is probably a huge expense reduction for all NATO donor countries.