---
kind: "section"
citation: "18 C.F.R. § 367.20"
title: "18"
number: "367.20"
heading: "Depreciation accounting."
url: "https://uscodex.org/cfr/18/367.20"
---

# §367.20. Depreciation accounting.

- (a) **Method.** Service companies must use a method of depreciation that allocates in a systematic and rational manner the service value of depreciable property over the service life of the property.
- (b) **Service lives.** Estimated useful service lives of depreciable property must be supported by objective evidence and analysis, including where appropriate engineering, economic, or other depreciation studies.
- (c) **Rate.** Service companies must use percentage rates of depreciation that are based on a method of depreciation that allocates the service value of depreciable property over the service life of the property. Where composite depreciation rates are used, they must be based on the weighted average estimated useful service lives of the depreciable property comprising the composite group.

## Notes

### Authority

Authority: 15 U.S.C. 717 et seq., 16 U.S.C. 791a et seq., and 42 U.S.C. 16451-16463.

### Source

Source: Order 684, 71 FR 65226, Nov. 7, 2006, unless otherwise noted.