Typical glider depreciation?

David Reitter wrote:
All, thanks for your replies.

I should clarify that this is about depreciation for valuation and
price calculation in our club and not for tax purposes.

What I am trying to come up with is a tariff for our club gliders.
The goal is to charge enough in glider rental to maintain the assets
of the club. Conceivably, this would mean not just to keep a fleet in
the air, but to replace gliders as they age so we have reasonably
recent gliders to fly. Depreciation may be a major component. How do
other clubs deal with such issues?

(To give more of a background: The club in question currently has a
Schweizer 2-33 as training glider, and then a 1-26, a Pilatus B4 and a
Grob 102 Astir, and a Piper Super Cub. I think this is somewhat
typical for a number of smaller clubs in the US, and worth
discussing. While I love the club and enjoy flying there, you will
probably all agree with me that a reasonable forward-looking plan has
to include an update of the fleet. That is why I'd like to figure
out reasonable rental charges for those a/c, but also for potential
upgrades.)



How long is a piece of string? You already had some great answers,
especially by Eric.

If depreciation worries you take some best guess stabs - including 0%
and 100% and run some numbers. But you have to stop fixating on this
highly variable and unpredictable number. If you want to sell some of
the current fleet you can guesstimate their value from recent ads.

More important things are likely raising money now for a new shiny
glider, recruiting new members, getting those members flying and
retaining them, recruiting/retaining good instructors and tow pilots,
getting club gliders and members to fly XC, encouraging members to
purchase private gliders, equipping club gliders for XC (pee tubes,
electronic varios, flight recorders, flight computers/PDAs etc.),
equipping gliders and tow planes with radios and PowerFLARM, paying
insurance, misc. repairs, glider refinishes, running the tow plane, tow
plane engine replacement etc., building/tie down/property costs,.... a
lot of stuff to actually think about there and much of which affects
hard cash flow now and is more useful than trying to worry about
something that is not possible to accurately answer.

Have you already raised the money to purchase the shiny glider, trailer
etc.


Darryl

On Aug 11, 3:13*am, Paul Ruskin wrote:
Assuming you're interested for valuation reasons, rather than US tax
ones...

I did some sums on the depreciation in real terms of an ASW20 over25
years, and got the answer of about 2.3% per annum.

This was based on finding an original 1984 price of $28,000 for an
ASW20C, and approximate asking prices in 2009 of $33,000, then
depreciating according to the retail price index (US, I think, though
I don't recall where I got that from).

Accounting is done in nominal dollars, not CPI-adjusted dollars. So in
fact from an accounting point of view you've seen 0 depreciation. In
fact less than 0.

Of course gliders will eventually wear out. If you are looking at
buying a shiny new one then it doesn't seem unreasonable to assume an
economic working life of at least 30 - 40 years, if not longer. A
Discus or Grob Twin from 1980 is still worth good money, and every
LIbelle's and Cirruses from around 1970 are in perfectly good working
order still and worth a lot more than zero.

I don't see any reason to think that a DG1000 or Duo will fare any
worse.

On Aug 10, 11:56*am, Mike the Strike wrote:
On Aug 10, 8:13*am, Paul Ruskin wrote:

Assuming you're interested for valuation reasons, rather than US tax
ones...

I did some sums on the depreciation in real terms of an ASW20 over25
years, and got the answer of about 2.3% per annum.

This was based on finding an original 1984 price of $28,000 for an
ASW20C, and approximate asking prices in 2009 of $33,000, then
depreciating according to the retail price index (US, I think, though
I don't recall where I got that from).

Could do with some more data points though.

Paul

Depreciation of the value of gliders - especially European built - has
been offset by the depreciation of the US dollar, which has dropped
from around 0.8 to the Euro to over 1.4. *This has nearly doubled the
dollar cost of new gliders imported from Europe into the USA in the
past ten years. *This depreciation of the dollar has led to much less
drop in value of gliders as they age in the US market.

Mike

The export of gliders out of the US in this period has been fairly
brusque. Is there anyway to look at number of deregistered gliders
from the FAA database?

On Sep 14, 6:59*pm, Kevin Christner wrote:
On Aug 10, 11:56*am, Mike the Strike wrote:









On Aug 10, 8:13*am, Paul Ruskin wrote:

Assuming you're interested for valuation reasons, rather than US tax
ones...

I did some sums on the depreciation in real terms of an ASW20 over25
years, and got the answer of about 2.3% per annum.

This was based on finding an original 1984 price of $28,000 for an
ASW20C, and approximate asking prices in 2009 of $33,000, then
depreciating according to the retail price index (US, I think, though
I don't recall where I got that from).

Could do with some more data points though.

Paul

Depreciation of the value of gliders - especially European built - has
been offset by the depreciation of the US dollar, which has dropped
from around 0.8 to the Euro to over 1.4. *This has nearly doubled the
dollar cost of new gliders imported from Europe into the USA in the
past ten years. *This depreciation of the dollar has led to much less
drop in value of gliders as they age in the US market.

Mike

The export of gliders out of the US in this period has been fairly
brusque. *Is there anyway to look at number of deregistered gliders
from the FAA database?

"brusque"?? .......rough and abrupt in manner or speech? Methinks
your spellchecker hijacked your post!

I suspect you mean there have been quite a few exports and indeed
there have. We lost a couple fro Arizona overseas (one to New
Zealand, if I remember correctly).

This supports my earlier point about the effects of exchange rates
when gliders are essentially valued in Euros.

Mike

On Aug 7, 8:57*pm, David Reitter wrote:
What is a typical depreciation value for gliders that clubs/owners use
in accounting for the cost of gliders? * Do you assume linear
depreciation?
(This is a difficult value to estimate, given the lack of easily
available data for second-hand glider prices throughout a reasonable
time span.)

The info is available.

For example, if you are interested in a Std. Libelle 201, go to the
Soaring Mag archives look in the classifieds, and see what a
particular sailplane was selling for in the 70's, 80's, 90's, etc and
you will get the general idea that will help you. The sailplanes
condition also plays into the equation.

Mike