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[quote user="Dakguy201"]  I believe worrying about depreciation based on their cost being charged to the Illinois trains is taking an approach that ignores the economic reality.  Put another way, at present the Talgos are serving no purpose, so their worth is scrap value.  Anything Illinois pays Wisconsin to lease or purchase these train sets is found money as far as Wisconsin is concerned and an improvement to that state's financial position.   Negotiators for Illinois should approach a deal with that position.   If such a transaction were made, you would have a new and reduced cost basis upon which to base much reduced depreciation charges.   [/quote] Without access to the accounting records, as well as the analytics associated with various scenarios for the equipment, it is not possible to determine whether transferring the equipment to Illinois would be a good deal. If the equipment were transferred to Illinois and placed in service, assuming that the cost basis is greater than the cost basis of the current equipment that it would replace; further assuming that it would be replacing equipment as opposed to adding additional capacity, the depreciation charges would increase, which would have a bottom line impact on the operator. Either way depreciation increases. If the equipment remains in Wisconsin and is not placed in service, there is no depreciation. Wisconsin and/or Talgo has a wasting asset on its hands. If Illinois were able to acquire the equipment in a fire sale, it would mean a loss for Wisconsin taxpayers and/or the company that build the Talgos. Depending on the analytics there are times when scrapping new equipment is the best option. Competitive businesses do it all the time.
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