It seems to me that you are mixing apples and oranges, capital and expence.
The way that my accountant explains it to me there are two classes of expenditures (capital and expense) and two classes of income (ordinary and capital gains).
What you pay for a hours, car, airplane, etc. is a capital expenditure. The money that you pay to operate and maintain it is expense. Major expense such as remodeling a house or a major overhaul are a little of both.
The cost for utilities (water, sewer, gas and electric for a house, fuel, oil, hanger etc. for an airplane), taxes, routine maintenance, insurance, etc. are cost of ownership and have nothing to do with the underling asset value. These are cost of ownership.
According to GAAP (generally accepted accounting practices) and the IRS (you know what that stand for) appreciation or depreciation is calculated by comparing the difference between the acquisition basis (what you paid for it) and the sale price. If when you sell it the sale price is greater than you basis your have a capital gain, it the sale price is lower than the purchase price you have a capital loss.
Example (a real case):
We buy a Cessna 150 for $7,500 in 1995.
After flying the airplane for 1250 hours,
We sell the airplane in 2005 for $17,500
We have realized a capital gain of $10,000.
During the ten years of ownership we spent an estimated:
$15,000 fuel
$ 8,000 for insurance
$15,000 for hanger rent
$ 3,000 for annual inspections
$ 7,000 for a major overhaul
$10,000 for maintenance
$ 3,750 for interest
$61,750 TOTAL EXPENCE ($49.40 per hour of flying time)
The $61,750 of expense has no effect on the asset value; we still have a capital gain of $10,000 (on which we will have to pay a long term capital gains tax of 15% or $1,500).
Did it cost a lot to own and fly the airplane? You bet it did ($6,175 per year).
Did the airplane appreciate? It sure did, $10,000 ($1,000 per year). When we sold the airplane we netted, after tax, $16,500 on a $7,500 investment, that is appreciation.
