Structure How should durable goods be treated in determining taxable income? Buying a drill press(that lasts for 10 years)is initially just an exchange of assets, not an economic cost As it is used, it is subject to wear and tear Which decreases its value. This decrease in value, called economic depreciation, is an economic cost to the firm8 Structure • How should durable goods be treated in determining taxable income? • Buying a drill press (that lasts for 10 years) is initially just an exchange of assets, not an economic cost. • As it is used, it is subject to wear and tear, which decreases its value. This decrease in value, called economic depreciation, is an economic cost to the firm