Building depreciation

I think that the depreciation index applied to buildings and or fixed assets should be reviewed.

In my opinion, as we do not have disasters and accidents, but only wear and tear over time and we live in real time or 24 hrs cycle, the depreciation costs appear to be very high.

As a matter of fact, how come a 49 days old production line could have lost or incurred a cost of 1/4 of its value?

I agree that some building structures may have greater wear, especially those used in extreme environmental conditions, but not all at same proportion in a short period of time.

Please disregard if this topic has already been addressed.

We are operating in roughly 20x speed. So 49 days is about 2.7 earth years (whatever those are).

Also, it’s worth noting that the “value” that is lost is in materials; the curve on %efficiency is much more gentle.

Compare to IRL; how likely is it you’ll be able to dismantle and rebuild an entire building without incurring any loss/replacement of components? It’s practically non-existent.

So, the “value” of a building is worth more than its constituent materials, based on profitability, production etc. but on a balance sheet, you’re only interested in the objective, rather than subjective, value.

It is unrealistic to try and maintain a building to ‘as new’ standard, both IRL and in a game, and this has the added benefit of preventing people spam deconstructing/reconstructing

The production cycle allocated in this simulator is in hours and days as well as the interplanetary trips and the contractual terms. Financial achievements are tied to this fraction of time. Therefore, depreciation should occur in the same fraction of time.

I did not say that the depreciation should be extinguished or that the building should remain new indefinitely, but that the wear should be revised because I think it is not proportional to the time of use.

The issue of depreciation of the building does not prevent people from demolishing and or rebuilding. If depreciation serves only to prevent that, it is wrong and is not acceptable.

What is it proportional to then? My understanding is that is a discrete-stepped linear relationship, approximating y = 1 - x/120 where y is the reclaimable material, and x is the time elapsed in days.

Maybe I’m misunderstanding, but it appears that your complaint is the balance sheet showing some ‘building depreciation’ number, and you think that number is too high; the much (imho) more useful complaint is how quickly materials become ‘unreclaimable.’

First off, depreciation is not a ‘real value,’ this is not currency leaving your account; it’s an averaged value of the degraded building materials; in order to maintain any asset you must periodically spend money on maintenance to ensure it works as intended; thus, in any balance sheet you will move some money from your ‘assets’ into an ‘escrow’ account in order to fund that maintenance in future; this is depreciation.

IRL, you can often spend this escrow on other things, and once that maintenance becomes due, you cover the costs with debt, as that escrow will no longer be liquid to purchase the required materials. This is not a feasible option in the long term, and there are many cases where creating growth with debt causes an org to go bankrupt precisely because they do not properly account depreciation; a more sustainable management involves using growth to cover costs, which involves ‘banking’ those costs before they come due.

Depreciation, then, is the monetary equivalent of degradation, and removing it from a balance sheet means that as soon as maintenance is due, you will be left with no option but to coliq, as you will have no ability to cover costs.

Correct; degradation is the process that prevents this, and depreciation is the financial equivalent. However, degradation is extremely effective at preventing deconstruction/rebuilding, as for any material used, you immediately lose 1 of each material - at the current stage of the game, this might not be as noticeable, but later down the line, this degradation is very effective for this purpose.

Say you build a new FRM, as the 100% degradation cutoff is 120 days (or 6 years, 208 days once scale factor is removed - see below), it costs 4 BSE, 4 BBH and 120 MCG. On the first day, the degradation of the BSE and BBH is 25%, while the MCG is 1/120th; at 59 days in, this is 50%, and 49.1% respectively.

No they are not; this is most noticeable if you plan a flight using the BLU command; fuel burn rate is listed in units/s but many of the flight options you plan are too short for that fuel rate to match the total fuel consumption - this is the only example of where the 20x scale factor is not used to display a time unit. This game uses real orbital physics, and as such, any flight in “real-time” would take anywhere from a month to years, and literally nobody would be playing. For comparison, you can make ~100 one-way flights between CX and uh, vallis, with the same ship before a building fully degrades, and i’d argue that spaceflight and atmospheric entry is significantly more time intensive than that.

So, now i’ve separated depreciation and degradation, what exactly is your complaint? Is it the line in the balance sheet, or the mechanic that underlies it?

Here’s a graph of reclaimable value (green) vs initial value - total 'depreciation' (red). For a building-material pair that needs 4 of the Material to construct the building (eg, BSE in an FRM)

Also, worth pointing out that this mechanic also allows for the removal of AFK players, which 3 months seems like a more-than-suitable period. Any extension means more plots occupied by non-players, another thing to think about when adjusting it

whatever forget about