Table 1
Depreciation patterns and methods used in Canada and the United States

Warning View the most recent version.

Archived Content

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.

  Canada United States
Method 1
  Derive geometric rates from DBR/T2 formula Derive geometric rates from DBR/T formula
Assumed DBRs1 1.65—machinery and equipment 0.9—structures 1.65—machinery and equipment 0.9—structures
Service lives Derived from ex ante estimates from investment survey Derived from tax records and other sources
Method 2
Step 1 (for assets with used asset prices and discard information) Estimate geometric depreciation rate directly and then estimate DBR using length of life T for these assets Estimate geometric depreciation rate directly and then estimate DBR using length of life T for these assets
Step 2 (for assets without used asset prices) Estimate geometric rate from implicit DBR derived in Step 1 for similar assets and estimate of expected length of life from investment survey Estimate geometric rate from implicit DBR derived in Step 1 for similar assets and estimate of expected length of life from various ad hoc sources
Method 3
  Derive geometric rates from DBR/T formula Derive geometric rates from DBR/T formula
Assumed DBRs 2.1—machinery and equipment 2.3—structures 1.65—machinery and equipment 0.9—structures
Service lives Derived from ex ante estimates from investment survey Taken from various tax and other sources in the United States

1. Declining-balance rates.

2. T stands the for service life of an asset.

Notes: Canadian and U.S. results are both based on the infinitely lived geometric model. Results shown are from authors' calculations.

Sources: Statistics Canada; and Bureau of Economic Analysis.