Calculation of Losses

Definition

Context

Methodology

A very importat part of  damage calculation process is the determination of 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.


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Module
Flood Risk Management
Source

TUHH

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