Classification of Fixed Asset Additions
We define recurring fixed asset additions to a property to be capital expenditures made to replace worn out assets to maintain the property's value. Revenue enhancing/non-recurring fixed asset additions are defined as capital expenditures that increase the value of the property and/or enable us to increase rents. Acquisition/development fixed asset additions are defined as capital expenditures for the purchase or construction of new properties to be added to our portfolio, or fixed asset additions identified at the time of purchase that are not made until subsequent periods.
Our industry needs to consider exactly how one compares a capital asset that INCREASES IN VALUE WITH TIME.
A GHEX enhances revenue by lowing the utility costs and has no recurring cost. A GHEX is a capital asset that replaces the kW*hr, kW and MCFs.
It is separate from the depreciating HVAC systems value and should be treated accordingly.
Any good ideas from Harvard type accountants?
Any guess as to what a GHEX costs per peak block load in $/kW? Further the GHEX has no operating costs as that is within the HVAC unit.
Excel spreadsheet to calculate $/kW