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Earned Economic Income—A Theory for Matching
Author(s) -
GRINYER JOHN R.
Publication year - 1985
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.1985.tb00116.x
Subject(s) - apportionment , matching (statistics) , economics , inflation (cosmology) , fixed income , econometrics , value (mathematics) , macroeconomics , finance , statistics , mathematics , physics , bond , theoretical physics , political science , law
The paper presents a novel ex post income concept, called Earned Economic Income (EEI), which would provide periodic accounting signals that are consistent with those derived from Net Terminal Value (NTV) analyses. EEI assigns interest adjusted NTV to the periods in which it is earned. The allocation is made via the apportionment of interest adjusted original cost. Inflation adjusted and monetary EEI figures are identical, so that the concept provides an integrating framework for interest adjusted inflation accounting and historical cost matching approaches. In developing the model the paper discusses the significance of conceptual models and of Economic Income (EI).