The purpose of depreciation accounting is to allocate the service value of a property over its’ service life, in a systematic and rational manner. The Uniform Classification of Accounts and Related Railway Records (UCA) specifies the procedures railway companies must follow when filing their annual depreciation rates for the Agency's approval.
Depreciation rates are based on the estimated service life of the depreciable property, which is determined by studying the carrier's history and all available information on future conditions. The approved rates are used to determine a railway companies' annual depreciation expense - historically a significant portion of total expenses of all regulated utilities.
The Agency annually approves depreciation rates for class I carriers, Canadian Pacific Railway (CP), and Canadian National Railway (CN), and reviews the rates of other companies on an as needed basis.
Depreciation Rates, as approved by the Agency, are asset specific, and based on highly specific and technical, investment and operational information of a carrier, and as such, the rates are held as confidential and are not published by the Agency.