The department calculates depreciation as follows:

1. (1) Masonry buildings are calculated using the straight-line depreciation method not to exceed three percent of the capital cost basis of the building. The capital cost basis for depreciation of new construction, major renovations, and facilities acquired through purchase is subject to a salvage value computation of at least fifteen percent;
2. (2) Frame buildings are calculated using the straight-line depreciation method not to exceed four percent of the capital cost basis of the building. The capital cost basis for depreciation of new construction, major renovations, and facilities acquired through purchase is subject to a salvage value computation of at least fifteen percent;
3. (3) Fixed equipment is calculated based on the useful life of the item as determined according to the Estimated Useful Lives of Depreciable Hospital Assets, 2018 Edition; and

4. (4) Major movable equipment, furniture, automobiles, and specialized equipment is calculated using the straight-line depreciation method and the useful life of the item is determined according to the Estimated Useful Lives of Depreciable Hospital Assets, 2018 Edition.

   A facility may deviate from a determination based on the Estimated Useful Lives of Depreciable Hospital Assets if the facility provides the department with documented historical proof of the asset's useful life.

   Reference: Estimated Useful Lives of Depreciable Hospital Assets, 2018 edition, published by the American Hospital Association, 155 North Wacker Drive, Chicago, Illinois 60606, https://www.aha.org/; $88.

Source: 16 SDR 26, effective August 13, 1989; transferred from § 67:16:04:08.07 , 21 SDR 8, effective July 25, 1994; 26 SDR 5, effective July 1, 1999; 26 SDR 21, effective August 24, 1999; 29 SDR 177, effective July 1, 2003; 35 SDR 312, effective July 6, 2009 ; 59 SDR 11, effective August 7, 2023 .

General Authority: SDCL 28-6-1 .

Law Implemented: SDCL 28-6-1 .

Prior versions effective: 2009-07-06.