Calculation of monetarily assessable losses caused by floods

The first step of calculation process is to calculate the asset values within the endangered area. The extent of the area under consideration as well as the availability and form of economic data determines which scale is the optimal scale.

The asset value is calculated based on the net asset value. Construction costs as well as inventory are included in this value. Asset value can be calculated using one of the following methods.

Asset Value at purchase price is calculated considering the cost price at the moment of there purchasing. It is important to distinguish between two concepts:

Gross concept considers the constant value during the whole lifecycle of asset.

Net concept takes depreciation and amortisation of fixed assets into account.

If the assets are changing during the time period problems arise.

Asset Value at actual price includes all prices for rebuilding flood affected units. Also in this method two concepts exists:

Net concept takes into account depreciation.

Gross concept evaluates without loss of actual value.

Damage assessment based on the net concept determines realistic monetary values.

In Germany the maximal loss can be calculated using a statistical-economical assessment of asset value.

Based on the asset values the maximal loss is calculated separated for each land use unit. This calculation considers the constructive total losses. But, it must be pointed out that even in case of extreme flood events, this value wont be reached and therefore has to be reduced later on. How this could be done in detail is described at the next page.