WAC 388-96-565
Lives. (1) Except for new buildings
replacement buildings, major remodels and major repair projects
as defined in subsection (5) of this section, to compute
allowable depreciation, the contractor must use lives reflecting
the estimated actual useful life of the assets (e.g., land
improvements, buildings, including major remodels and major
repair projects, equipment, leasehold improvements, etc.).
However the lives used must not be shorter than guidelines lives
in the most current edition of Estimated Useful Lives of
Depreciable Hospital Assets published by American Hospital
Publishing, Inc.
(2) To compute allowable depreciation for major remodels and
major repair projects as defined in subsection (5) of this
section that began operating:
(a) Before July 1, 1997, the contractor must use the
shortest lives in the most recently published lives for
construction classes as defined and described in the Marshall
Valuation Service published by the Marshall Swift Publication
Company; or
(b) After July 1, 1997, the contractor must use the shortest
lives of the guideline lives in the most current edition of
Estimated Useful Lives of Depreciable Hospital Assets published
by American Hospital Publishing, Inc.
(3) To compute allowable depreciation for new buildings and
replacement buildings as defined in subsection (5) of this
section that:
(a) Began operating before July 1, 1997, the contractor must
use the construction classes as defined and described in Marshall
Valuation Service published by the Marshall Swift Publication
Company; provided that, thirty years is the shortest life that
may be used;
(b) Began operating on or after July 1, 1997, the contractor
must use the most current edition of Estimated Useful Lives of
Depreciable Hospital Assets published by American Hospital
Publishing, Inc.; provided that, thirty years is shortest life
that may be used; and
(c) Received certificate of need approval or certificate of
need exemptions under chapter 70.38 RCW on or after July 1, 1999,
the contractor must use the most current edition of Estimated
Useful Lives of Depreciable Assets published by American Hospital
Publishing, Inc.; provided that, forty years is the shortest life
that may be used.
(4) To compute allowable depreciation, the contractor must:
(a) Measure lives from the most recent of either the date on
which the assets were first used in the medical care program or
the last date of purchase of the asset through an arm's-length
acquisition; and
(b) Extend lives to reflect periods, if any, during which
assets were not used in a nursing facility or as a nursing
facility.
(5) New buildings, replacement buildings, major remodels,
and major repair projects are those projects that meet or exceed
the expenditure minimum established by the department of health
pursuant to chapter 70.38 RCW.
(6) Contractors shall depreciate building improvements other
than major remodels and major repairs defined in subsection (5)
of this section over the remaining useful life of the building,
as modified by the improvement, but not less than fifteen years.
(7) Improvements to leased property which are the
responsibility of the contractor under the terms of the lease
shall be depreciated over the useful life of the improvement in
accordance with American Hospital Association guidelines.
(8) A contractor may change the estimate of an asset's
useful life to a longer life for purposes of depreciation.
(9) For new or replacement building construction or for
major renovations receiving certificate of need approval or
exemption under chapter 70.38 RCW on or after July 1, 1999, the
department will depreciate fixed equipment the same number of
years as the life of the building to which it is affixed.
[Statutory Authority: Chapter 74.46 RCW, 1999 c 376 § 3 amending
c 309 § 207. 99-24-084, § 388-96-565, filed 11/30/99, effective
12/31/99. Statutory Authority: RCW 74.46.310, [74.46.]320 and[74.46.]330
. 97-17-040, § 388-96-565, filed 8/14/97, effective
9/14/97. Statutory Authority: RCW 74.46.800. 94-12-043 (Order
3737), § 388-96-565, filed 5/26/94, effective 6/26/94. Statutory
Authority: RCW 74.09.180 and 74.46.800. 89-01-095 (Order 2742),
§ 388-96-565, filed 12/21/88. Statutory Authority: RCW 74.46.800. 87-09-058 (Order 2485), § 388-96-565, filed 4/20/87;
86-10-055 (Order 2372), § 388-96-565, filed 5/7/86, effective
7/1/86. Statutory Authority: RCW 74.09.120. 83-19-047 (Order
2025), § 388-96-565, filed 9/16/83; 81-22-081 (Order 1712), §
388-96-565, filed 11/4/81. Statutory Authority: RCW 74.09.120
and 74.46.800. 81-06-024 (Order 1613), § 388-96-565, filed
2/25/81; Order 1262, § 388-96-565, filed 12/30/77.]