BCRI’s Telecommunications
Depreciation Tables
IntroductionBCRI’s Communications Depreciation Tables reflect the realities of the rapidly changing communications markets. They capture the loss in economic value due to physical deterioration, functional and technological obsolescence, and other forms of external obsolescence impacting the communications industries. This section provides a brief description of the plant accounts for which depreciation tables are provided. A listing of the communication tables is provided below in Table 1, and the full depreciation tables are provided at the end of this chapter and in electronic format on the accompanying CD.
Summary of 2007 ChangesAll depreciation tables and factors were updated effective January 1, 2007 to reflect all changes in depreciation and obsolescence levels resulting from passage of time since the last update.
Abnormal obsolescence (e.g. technological substitution) models do not generally change from year to year. These models inherently capture the change in utility of the subject technology over time. A notable exception is when there are overlapping technological substitutions and either an old technology becomes immaterial or a new technology emerges. In this case, the model itself may require updating. This year, for example, the underlying obsolescence models for Wireless PCS equipment were revised to reflect the diminishing impact of G1 and G2.0 technology and the increasing impact of the anticipated rollout of G4 technology.
While the underlying obsolescence models generally do not change from year to year, the levels of technological obsolescence will typically change over time. Each year, BCRI updates its economic lives and depreciation tables to reflect changes in the levels of obsolescence.
Physical depreciation and ordinary obsolescence are functions of age and are not materially impacted from one year to the next. History has shown that these forms of depreciation can be reliably modeled using mortality survivor curves. Each year, BCRI verifies the mortality survivor curves used for physical depreciation and ordinary obsolescence and updates them where necessary.
Category ChangesAt BCRI we try to maintain stability in our classes of plant and avoid unnecessary changes; however, classification changes may be required to address the emergence of new technologies or the demise of older technologies. Additionally, classification changes may be necessary to reflect classification changes in the industry. This year various new plant classifications were added and a few were discontinued. The following table, Table 1, lists all current and discontinued categories of plant. New and discontinued categories are indicated in the table and further described later in this chapter.
Table SEQ Table \* ARABIC 1 – BCRI’s Communication Depreciation Tables
Description of Major Network SegmentsCommunication networks consist of an integrated collection of sub-networks, each providing a different functionally and in some cases, a different physical environment. These differe | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||