Journal of Korean Society of Industrial and Systems Engineering (산업경영시스템학회지)

Society of Korea Industrial and System Engineering (한국산업경영시스템학회)
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A Study on the Estimation of Economic Depreciation Rate on Industrial Property Using Equal Life Group Procedure

ELG 방법을 활용한 제조설비의 경제적 감가상각률 추정방안

  • Oh, H.S. (Department of Industrial Engineering and Management, Hannam University) ;
  • Kwon, S.H. (Department of Statistics, Hannam University) ;
  • Sung, I.S. (Department of Chinese Studies, Hannam University) ;
  • Cho, J.H. (Division of Industrial Engineering, Kumoh National Institute of Technology)
  • 오현승 (한남대학교 공과대학 산업경영공학과) ;
  • 권세혁 (한남대학교 경상대학 비즈니스통계학과) ;
  • 성일석 (한남대학교 경상대학 중국통상학과) ;
  • 조진형 (금오공과대학교 산업공학부)
  • Received : 2013.01.21
  • Accepted : 2013.02.15
  • Published : 2013.03.31
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Abstract

Several different depreciation systems may be used for group depreciation. The vintage group procedure treats the same type of property placed in service during the same year as a distinct group for depreciation purposes; therefore an estimate of the probable average service life and net salvage ratio(s) of each individual vintage is necessary. The vintage group procedure calculates an accrual rate for each vintage and the accrual rate for an account for specific calendar year is the weighted average vintage accrual rate for that calendar year. A further refinement would be to divide each vintage into groups such that all of the dollars in a group have the same estimated life-an equal life group (ELG). Then each ELG is depreciated over its estimated life. The effect is to recover each dollar over the estimated number of years it is in service. Each vintage is divided into several equal life groups (ELGs) such that all the property in a specific ELG has the same estimated life. The accrual rate for each ELG is based on the estimated life of that ELG. The vintage accrual rate for a specific year is the weighted average ELG accrual rate for that calendar year. In this paper, we illustrate the calculations of vintage accrual rates for each of the calendar years by the ELG depreciation systems.

Keywords

Acknowledgement

Supported by : Hannam University

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  1. 제조설비의 실제적 감가상각을 위한 경제적 감가상각률 추정방안 vol.37, pp.1, 2013, https://doi.org/10.11627/jkise.2014.37.1.115