Depreciation and Use Allowances. Depreciation and use allowances are unallowable.
Depreciation and Use Allowances a. Compensation for the use of buildings, other capital improvements, and equipment on hand may be made through use allowance or depreciation. However, except as provided in Attachment B, paragraph f, a combination of the two methods may not be used in connection with a single class of fixed assets (e.g., buildings, office equipment, computer equipment, etc.).
Depreciation and Use Allowances a . Hos- pi t a l s m a y be co m pe n s a t ed fo r t h e u se of b u ildi n gs, c a pi t a l i m p r ove m e n t s a n d u s a ble eq u ip m e n t o n h a n d t xx x x x x dep r eci a t io n o r u se a llow a n ces. Dep r eci a t io n i s a c h a r ge t o c urr e n t ope r a t io n s w h ic h dis t r ib u t es t h e cos t of a t a n gible c a pi t a l a sse t , less es t i m a t ed r e- s id u a l v a l u e, ove r t h e es t i m a t ed u sefu l life of t h e a sse t i n a s y s t e m a t ic a n d logic x x x x n- n e r . I t does n o t i n volve a p r ocess of v a l u- a t io n . Usefu l life h a s r efe r e n ce t o t h e p r o- spec t ive pe r iod of eco n o m ic u sefu l n ess i n t h e p a r t ic u l a r h ospi t a l’s ope r a t io n s a s dis t i n- g u i s h ed f r o m p hy sic a l life. Use a llow a n ces a r e t h e m e a n s of a llowi n g co m pe n s a t io n w h e n dep r eci a t io n o r o t h e r eq u iv a le n t cos t s a r e n o t co n s ide r ed.
Depreciation and Use Allowances. The Computation of use allowances or depreciation shall be based on the acquisition costs of the assets involved. Where actual cost records have not been maintained, a reasonable estimate of the original acquisition costs may be used in the computation.
