Depreciation works when assets behave predictably. Surplus is not that world.
Surplus begins the moment an asset loses its operating context. The asset may still function, but the economic question changes from "how much life is left?" to "what is the decision latency?"
Option value decays faster than the asset itself. It decays when condition becomes uncertain, documentation separates from equipment, or holding costs become political.
Surplus value tracks decision latency. Value drops in steps based on events: closures, compliance changes, or loss of documentation.
Anchoring on book value creates two predictable, value-destroying behaviors in your organization.
Buyers do not pay for what an asset might be. They pay for what it can be proven to be. Internal redeployment fails when receiving teams cannot trust the asset identity or condition.
"In surplus, the enterprise is not valuing the asset. It is valuing the likelihood of a successful outcome."
A surplus-capable enterprise does not discard depreciation. It simply refuses to treat it as a value model. It introduces a parallel decision model for assets after use.
Model is portfolio-based, not anecdotal.
Segments assets by risk and materiality.
Defines strict time-to-decision and time-to-exit metrics.
Connects realized outcomes back into future decision ranges.