Common use of Depreciation and Amortization Clause in Contracts

Depreciation and Amortization. Depreciation charges are shown in Table 8: above. The charges reflect common DES utility accounting practice and estimated useful life of each asset group. The 30-year forecast period for the financial model is, on balance, in line with the end of the useful life of the plant and equipment, although it is reasonable that actual asset life will vary and replacement of plant and equipment might need to occur before the end of 30 years. (Also, the 30-year forecasted period was chosen because the terms of the Infrastructure Agreement allow UBC to purchase the NDES at that point.) Notwithstanding, the useful life assumptions for accounting depreciation, and the capital maintenance program is intended to allow plant, equipment and other infrastructure to meet or surpass the expected useful life.