What is NOT usually considered in the decision to decommission and dispose of assets?

The depreciated value (or book value) of an asset is an accounting construct for tax and financial reporting purposes, based on historical cost and a depreciation schedule. It rarely reflects the asset's true market value, operational value, or the economic reality of its disposal. Decisions on decommissioning should be forward-looking, based on factors like future costs, risks, performance, residual (market) value, and legal or environmental obligations, not on a sunk cost represented by its book value.

A. The residual value of assets: This is the expected market or scrap value, a key financial input for the disposal decision.

B. Alternative uses for the assets: Re-purposing or redeploying an asset is a primary alternative to disposal and must be considered.

D. The environmental impact of disposing of the assets: This is a critical consideration due to regulations and corporate social responsibility, influencing disposal methods and costs.

E. Legislation regarding disposal of the assets: Legal compliance is mandatory and dictates constraints, procedures, and potential liabilities associated with asset disposal.

1. The Institute of Asset Management (IAM). (2015). Asset Management - An Anatomy (Version 3). Section 3.6.6, "Asset Decommissioning and Disposal," outlines considerations such as residual value, disposal costs, and regulatory requirements, but not accounting depreciation.

2. Global Forum on Maintenance and Asset Management (GFMAM). (2014). The Asset Management Landscape (2nd ed.). Subject Area 25: Asset Decommissioning and Disposal, focuses on the practical, environmental, and legal aspects of disposal.

3. Woodhouse, J. (2013). Asset Management Decision-Making: The SALVO Process. The Woodhouse Partnership Ltd. Chapter 4 discusses that decisions should be based on forward-looking economics (value, cost, risk), not backward-looking accounting figures like book value.