EAM.8:4.3 - Reconcile horizon and ending

Place the alternatives on a common service and analysis horizon. If their technical lives differ, describe the further work needed to cover that horizon or obtain an applicable value of remaining service. A repeating replacement chain needs supported availability, duty and cost assumptions; extending an annuity factor cannot supply them.

Distinguish the end of the study from the end of use. If the asset continues beyond the explicit account, obtain a remaining-value estimate consistent with that continuation and its further support needs. FIN.7 develops valuation under a stated continued-use or disposal premise. If the asset will actually be withdrawn, use realizable proceeds and the dated cost of disconnection, disposal, closure or replacement service as applicable. Book value alone supplies neither answer. Do not add liquidation proceeds for resources whose continuing use is already included in the terminal value.

When only the explicit table endpoint moves, reconcile the value at the new endpoint with the same later payments and ending premise. The whole policy’s present cost remains the same. If a supplied valuation disagrees, use FIN.7 to identify the changed cash, dates, rights or assumptions before relying on it.

Use constant prices with a real discount rate, or a consistent current-price basis with its corresponding rate. Changing the required service horizon calls for reconsidering which interventions occur, which support still applies and what ending is being valued. If the service itself ends, reconsider withdrawal and other alternatives.