{"id":6871,"date":"2021-03-11T15:43:00","date_gmt":"2021-03-11T15:43:00","guid":{"rendered":"https:\/\/swefc.unm.edu\/IAMFTest\/?page_id=6871"},"modified":"2026-09-09T21:53:58","modified_gmt":"2026-09-09T21:53:58","slug":"life-cycle-costing-understanding-the-costs-appreciation-depreciation","status":"publish","type":"page","link":"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/","title":{"rendered":"Life Cycle Costing \/ Understanding the Costs \/ Appreciation \/ Depreciation"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; custom_padding_last_edited=&#8221;on|tablet&#8221; admin_label=&#8221;Popup &#8211; #undefined&#8221; _builder_version=&#8221;4.8.1&#8243; _module_preset=&#8221;default&#8221; positioning=&#8221;none&#8221; horizontal_offset_tablet=&#8221;&#8221; horizontal_offset_phone=&#8221;&#8221; horizontal_offset_last_edited=&#8221;on|tablet&#8221; custom_margin=&#8221;0px||||false|false&#8221; custom_margin_tablet=&#8221;&#8221; custom_margin_phone=&#8221;&#8221; custom_margin_last_edited=&#8221;on|desktop&#8221; custom_padding=&#8221;0px|||0px|false|false&#8221; custom_padding_tablet=&#8221;|||25px|false|false&#8221; custom_padding_phone=&#8221;&#8221; da_disable_devices=&#8221;off|off|off&#8221; custom_padding__hover_enabled=&#8221;on|desktop&#8221; da_is_popup=&#8221;off&#8221; da_exit_intent=&#8221;off&#8221; da_has_close=&#8221;on&#8221; da_alt_close=&#8221;off&#8221; da_dark_close=&#8221;off&#8221; da_not_modal=&#8221;on&#8221; da_is_singular=&#8221;off&#8221; da_with_loader=&#8221;off&#8221; da_has_shadow=&#8221;on&#8221;][et_pb_row _builder_version=&#8221;4.8.1&#8243; _module_preset=&#8221;default&#8221; width=&#8221;100%&#8221;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;4.8.1&#8243; _module_preset=&#8221;default&#8221;][et_pb_text _builder_version=&#8221;4.9.2&#8243; _module_preset=&#8221;default&#8221;]<\/p>\n<h2>Appreciation and Depreciation of Assets<\/h2>\n<p>&nbsp;<\/p>\n<p>Since various assets perform differently over time, it is important to understand how those assets will affect the system\u2019s accounting and finances. Asset types have different <a href=\"https:\/\/swefc.unm.edu\/IAMFTest\/current-state-of-assets-type-of-inventory-information-to-collect-condition\/\">performance or decay curves<\/a>. The condition of gray assets typically begins to deteriorate as soon as they are put into service. Green assets can be the opposite. A green asset\u2019s condition might improve over the first few years of the asset\u2019s life, and then flatten out for a period (possibly an extended period) and eventually begin to decay. For either type of asset, intervening with maintenance, repair and\/or rehabilitation returns functionality to the asset and extends its life. System staff must think about how the asset condition will impact the accounting records for the system. Be aware that maintaining an asset not owned by the system can affect the way accounting recognizes those expenditures. This situation might not be a major issue for small maintenance expenditures, but for large expenditures on natural assets, such as forest thinning, it might be difficult for expenditures to be seen as a capital expense. More information can be found in <a href=\"https:\/\/www.waterrf.org\/research\/projects\/asset-management-framework-forested-and-natural-assets\">The Water Research Foundation Project No. 4727<\/a>, <em>Asset Management Framework for Forested and Natural Assets<\/em>, Section 10.2.2.<\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Appreciation and Depreciation of Assets &nbsp; Since various assets perform differently over time, it is important to understand how those assets will affect the system\u2019s accounting and finances. Asset types have different performance or decay curves. The condition of gray assets typically begins to deteriorate as soon as they are put into service. Green assets can be the opposite. A green asset\u2019s condition might improve over the first few years of the asset\u2019s life, and then flatten out for a period (possibly an extended period) and eventually begin to decay. For either type of asset, intervening with maintenance, repair and\/or rehabilitation returns functionality to the asset and extends its life. System staff must think about how the asset condition will impact the accounting records for the system. Be aware that maintaining an asset not owned by the system can affect the way accounting recognizes those expenditures. This situation might not be a major issue for small maintenance expenditures, but for large expenditures on natural assets, such as forest thinning, it might be difficult for expenditures to be seen as a capital expense. More information can be found in The Water Research Foundation Project No. 4727, Asset Management Framework for Forested [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"<!-- wp:divi\/placeholder \/-->","_et_gb_content_width":"","footnotes":""},"class_list":["post-6871","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Life Cycle Costing \/ Understanding the Costs \/ Appreciation \/ Depreciation - Integrated Asset Management Framework<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Life Cycle Costing \/ Understanding the Costs \/ Appreciation \/ Depreciation - Integrated Asset Management Framework\" \/>\n<meta property=\"og:description\" content=\"Appreciation and Depreciation of Assets &nbsp; Since various assets perform differently over time, it is important to understand how those assets will affect the system\u2019s accounting and finances. Asset types have different performance or decay curves. The condition of gray assets typically begins to deteriorate as soon as they are put into service. Green assets can be the opposite. A green asset\u2019s condition might improve over the first few years of the asset\u2019s life, and then flatten out for a period (possibly an extended period) and eventually begin to decay. For either type of asset, intervening with maintenance, repair and\/or rehabilitation returns functionality to the asset and extends its life. System staff must think about how the asset condition will impact the accounting records for the system. Be aware that maintaining an asset not owned by the system can affect the way accounting recognizes those expenditures. This situation might not be a major issue for small maintenance expenditures, but for large expenditures on natural assets, such as forest thinning, it might be difficult for expenditures to be seen as a capital expense. More information can be found in The Water Research Foundation Project No. 4727, Asset Management Framework for Forested [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/\" \/>\n<meta property=\"og:site_name\" content=\"Integrated Asset Management Framework\" \/>\n<meta property=\"article:modified_time\" content=\"2026-09-09T21:53:58+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\\\/\",\"url\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\\\/\",\"name\":\"Life Cycle Costing \\\/ Understanding the Costs \\\/ Appreciation \\\/ Depreciation - Integrated Asset Management Framework\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/#website\"},\"datePublished\":\"2021-03-11T15:43:00+00:00\",\"dateModified\":\"2026-09-09T21:53:58+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Life Cycle Costing \\\/ Understanding the Costs \\\/ Appreciation \\\/ Depreciation\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/#website\",\"url\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/\",\"name\":\"Integrated Asset Management Framework\",\"description\":\"Combining Green and Gray Assets\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/swefc.unm.edu\\\/IAMFTest\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Life Cycle Costing \/ Understanding the Costs \/ Appreciation \/ Depreciation - Integrated Asset Management Framework","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/","og_locale":"en_US","og_type":"article","og_title":"Life Cycle Costing \/ Understanding the Costs \/ Appreciation \/ Depreciation - Integrated Asset Management Framework","og_description":"Appreciation and Depreciation of Assets &nbsp; Since various assets perform differently over time, it is important to understand how those assets will affect the system\u2019s accounting and finances. Asset types have different performance or decay curves. The condition of gray assets typically begins to deteriorate as soon as they are put into service. Green assets can be the opposite. A green asset\u2019s condition might improve over the first few years of the asset\u2019s life, and then flatten out for a period (possibly an extended period) and eventually begin to decay. For either type of asset, intervening with maintenance, repair and\/or rehabilitation returns functionality to the asset and extends its life. System staff must think about how the asset condition will impact the accounting records for the system. Be aware that maintaining an asset not owned by the system can affect the way accounting recognizes those expenditures. This situation might not be a major issue for small maintenance expenditures, but for large expenditures on natural assets, such as forest thinning, it might be difficult for expenditures to be seen as a capital expense. More information can be found in The Water Research Foundation Project No. 4727, Asset Management Framework for Forested [&hellip;]","og_url":"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/","og_site_name":"Integrated Asset Management Framework","article_modified_time":"2026-09-09T21:53:58+00:00","twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/","url":"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/","name":"Life Cycle Costing \/ Understanding the Costs \/ Appreciation \/ Depreciation - Integrated Asset Management Framework","isPartOf":{"@id":"https:\/\/swefc.unm.edu\/IAMFTest\/#website"},"datePublished":"2021-03-11T15:43:00+00:00","dateModified":"2026-09-09T21:53:58+00:00","breadcrumb":{"@id":"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/swefc.unm.edu\/IAMFTest\/life-cycle-costing-understanding-the-costs-appreciation-depreciation\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/swefc.unm.edu\/IAMFTest\/"},{"@type":"ListItem","position":2,"name":"Life Cycle Costing \/ Understanding the Costs \/ Appreciation \/ Depreciation"}]},{"@type":"WebSite","@id":"https:\/\/swefc.unm.edu\/IAMFTest\/#website","url":"https:\/\/swefc.unm.edu\/IAMFTest\/","name":"Integrated Asset Management Framework","description":"Combining Green and Gray Assets","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/swefc.unm.edu\/IAMFTest\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/swefc.unm.edu\/IAMFTest\/wp-json\/wp\/v2\/pages\/6871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swefc.unm.edu\/IAMFTest\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/swefc.unm.edu\/IAMFTest\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/swefc.unm.edu\/IAMFTest\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/swefc.unm.edu\/IAMFTest\/wp-json\/wp\/v2\/comments?post=6871"}],"version-history":[{"count":8,"href":"https:\/\/swefc.unm.edu\/IAMFTest\/wp-json\/wp\/v2\/pages\/6871\/revisions"}],"predecessor-version":[{"id":26448,"href":"https:\/\/swefc.unm.edu\/IAMFTest\/wp-json\/wp\/v2\/pages\/6871\/revisions\/26448"}],"wp:attachment":[{"href":"https:\/\/swefc.unm.edu\/IAMFTest\/wp-json\/wp\/v2\/media?parent=6871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}