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Author Topic: Book value?  (Read 199 times)

Offline trickster69

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Book value?
« on: January 09, 2016, 01:33:11 AM »
Hi, this may be a Sami question, but does anyone know how the book value is calculated over time?  I'm not an accountant but it should eventually go to zero - i.e. you have an asset (the plane) and you depreciate over time (30 years?) until it's worth zero. 

However I've got planes in storage that are 48 years old that still have a book value of $15m. The way the game plays now it means I have hundreds of planes in storage representing a lot of my company value.  While it's not something to change mid-game world surely they should go to zero eventually. 

Or do I have this wrong? 

Offline schro

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Re: Book value?
« Reply #1 on: January 09, 2016, 01:35:41 AM »
They are depreciated on a straight line basis for the first 25 years of their life, with the target value one that should approximate scrap value at 25 years. After 25 years, they're considered fully depreciated.

In real bean counting, you are to depreciate to the estimated scrap value and then carry that on your books (though, in theory, if you change your useful life estimates you're supposed to adjust your depreciation expense a bit.. but that's beyond the intent of the game).

So yes, you can elect to keep planes in storage that make up part of your CV and I don't think it's appropriate to depreciate them to zero either...


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