Producer Price Index for 2022
The Producer Price Index has been updated for 2022. This Index can be used to calculate your partial disposition, if it is determined to be a reasonable method. The PPI Method should ONLY be used when the replacement item is:
- Being capitalized
- Similar in quality
- Not a Betterment or Adaptation (which means they are not similar to the item being disposed)
- Purchased at a premium or discount – this potentially makes this method not reasonable
Remember, if you take a partial disposition, you can then write off removal costs.