Measuring the Age of Machinery and Equipment in Czech Republic

Balances of fixed capital are constructed on the basis of international standards. Because the indicators of fixed capital are required to be in market prices and based on the real service lives of assets, the business bookkeeping data are insufficient. Moreover, the stocktaking for the whole economy is impossible. Therefore, processes of retirement, decay and obsolescence of fixed capital are subject of the modelling. Stocks and consumption of fixed capital are estimated by a Perpetual Inventory Method. In the paper, the transformation of the Czech model of the Perpetual Inventory Method is applied to estimate the indicator, which is not in the scope of annual accounts. On the basis of Markov chain approach to maintenance models we estimate the age structure and the average age of chosen assets in the Czech economy. The analysis uses also the basic demographic indicators to describe the ageing situation in Czech industries. Due to the different service lives in various industries, the average age of machinery and equipment is compared on the basis of life expectancy and quantile analysis. Industries with extreme age of machinery and equipment are presented in the paper.