Cal. Code Regs. tit. 2 § 1101.6
As used in this section "actual" depreciation refers to depreciation based on the cost, or appraised value if cost is not readily available, and estimated lives of individual assets, or limited groups of like assets. Actual "straight line" depreciation is preferred. However, since at the effective date of this System many districts will lack both historical cost of fixed assets and experience in depreciation, the following approximation may be used.
1970-71 (or first fiscal year starting after July 1, 1970) is the base year. Depreciation for this year will be 40% of total operating expenses exclusive of depreciation. For 1971-72 the depreciation allowance will be 38.75% of base year operating expenses, plus actual depreciation on assets acquired on or after July 1, 1970. Thereafter the percentage declines 1 1/4% per year, until after 32 years depreciation will be entirely on an actual basis.
Depreciation Allowance on Fixed Assets Acquired Prior to 7-1-70
Year Ending June 30 % | Year Ending June 30 % | Year Ending June 30 % | Year Ending June 30 % | ||||
1971 | 40 | 1979 | 30 | 1987 | 20 | 1995 | 10 |
2 | 38.75 | 80 | 28.75 | 8 | 18.75 | 6 | 8.75 |
3 | 37.5 | 1 | 27.5 | 9 | 17.5 | 7 | 7.5 |
4 | 36.25 | 2 | 26.25 | 90 | 16.25 | 8 | 6.25 |
5 | 35 | 3 | 25 | 1 | 15 | 9 | 5 |
6 | 33.75 | 4 | 23.75 | 2 | 13.75 | 2000 | 3.75 |
7 | 32.5 | 5 | 22.5 | 3 | 12.5 | 1 | 2.5 |
8 | 31.25 | 6 | 21.25 | 4 | 11.25 | 2 | 1.25 |
These estimates are designed to exclude depreciation on underground and underwater plant. However, they will include depreciation applicable to any surface assets which have been donated.
Balance sheet values with respect to fixed assets acquired prior to July 1, 1970 may be estimated as follows:
Underground & underwater plant | 20 X base year operating expenses. |
All other plant | 12.8 X base year operating expenses. |
Allowance for depreciation --All other plant | 6.2 X base year operating expenses. |
A district commencing under the Optional Method may switch to actual depreciation in any subsequent year. A district may not change from actual to Optional depreciation.
Cal. Code Regs. Tit. 2, § 1101.6