Expected service lives and depreciation profiles for capital assets: Evidence based on a survey of Norwegian firms

Abstract

This paper presents results from a survey of Norwegian firms on their perception of expected economic service life of various fixed capital assets as well as their assessment of depreciation profiles. An econometric analysis for two types of capital assets, where second hand markets and prices are available, shows that expected service life for Machinery and equipment for mining and manufacturing is estimated to be between 9 and 10 years. For Tools, instruments, furnishings etc. the expected service life is estimated to be 8 years. These results are in line with a descriptive analysis of the survey and they are also quite similar to those found in the existing literature. Results from this study have been used in a revision of the Norwegian national accounts.

Keywords

Depreciation capital stock service lives survey

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