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Brown, Williams, Moorhead & Quinn, Inc.

When depreciable property reaches the end of its service life, its physical retirement is accomplished by either 1) abandonment in place, 2) removal and storage for future use, or 3) removal and disposal. The cost of dismantlement, decommissioning, removal, and site remediation must be incorporated into the expenses associated with the depreciation of the original cost of the asset. The reuse or sale of the plant can offset these costs to some degree. Net salvage is the difference between the revenues realized from selling the retired plant and the costs associated with the retirement. The net salvage is estimated for both interim retirements and final termination retirements. Brown Williams assessment of retirement patterns, removal costs, and salvage estimates protects its clients from under- or over-recovery due to retirement costs.