asked the Minister for Transport and Power what would a normal year's depreciation in the accounts of Irish Shipping be in the year ended 31st March 1962 as distinct from the figure of £491,472 provided in the profit and loss appropriation account for that year.
Ceisteanna—Questions. Oral Answers. - Irish Shipping Limited Accounts.
15.
As shown in the Company's accounts full depreciation on the fleet of Irish Shipping Ltd. for the eleven months ended 31st March, 1962 was £691,472. This compares with the figure of £491,472 shown in the Profit and Loss Appropriation Account for the same period.
I am quite well aware of those figures. In the course of the comments made by the representative of the Minister for Finance who attended and spoke at that meeting, he referred to the different appearance that would be presented by the accounts, if the normal year's depreciation were provided by the company. I want to know what is a normal year's depreciation within the meaning of those words which presumably had some informed meaning.
A normal year's depreciation is the depreciation declared by the company on each vessel for which in respect of all the days in the year on which it made voyages its profit or loss is calculated. The depreciation of the vessel for that voyage is included in the account and the total of all the voyages and of the depreciations arising therefrom, after calculating the profit or loss, are added together for the full year and worked out on a percentage basis in relation to the life of the ship. That is the full year's depreciation. I cannot explain it to the Deputy any more clearly.
I appreciate the Minister's endeavour to clarify this matter. I understand there has been established through centuries of experience a regular percentage of depreciation appropriate to a merchant fleet and that figure must be known to Irish Shipping, and every other shipping company in the world. Whether it is ten per cent., or 15 per cent., or 20 per cent. I do not know. What I want to find out is what the figure is. Is it five per cent., or two per cent., or ten per cent, or what is it?
The percentage in most cases is five per cent.
Per ship?
There are some cases where it is 6½ per cent., and there are just one or two cases where the variation is slightly upwards.
We can say then five per cent. to eight per cent.
Five per cent. to six per cent. —mostly five per cent., but a few six per cent.
On the cost price or balance sheet value of the ships, whichever is the less?
Yes.
And is that figure of £691,000 representing five per cent. or six per cent. of the balance sheet value of the ships in the fleet?
No. I do not want to make this discussion more complicated than it need be, but Irish Shipping work out the depreciation on the basis of a separate valuation for each ship, and in relation to its voyages during the year, and then the totals are added together. There is no one figure applied to the whole fleet. There is a separate figure calculated for each ship.
Can the Minister give us then the capital value of the fleet so that we may compare, for our own information, the difference between depreciation calculated in the customary way and the depreciation provided as a result of the special calculations made by Irish Shipping?
If the Deputy will put down a question, I think I can satisfy him on that.
The Minister has not got with him now the capital value?
I should not like to go further. I have the balance sheets here, but I think the Deputy really should ask a question about them.
As to the capital value of the fleet?
Yes.
I can do that, but it is a rather elaborate way to go about it.