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A New Approach to Depreciation
Author(s) -
GRINYER JOHN R.
Publication year - 1987
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.1467-6281.1987.tb00138.x
Subject(s) - depreciation (economics) , consumption of fixed capital , matching (statistics) , ledger , economics , fixed asset , earnings before interest, taxes, depreciation, and amortization , econometrics , terminal (telecommunication) , accounting , computer science , macroeconomics , microeconomics , mathematics , production (economics) , statistics , profit (economics) , earnings , financial capital , capital formation , telecommunications
This paper presents a new ‘matching’ based approach to depreciation that incorporates interest adjustments and generates accounting measurements that are consistent with the ex post Net Terminal Values of fixed assets. The method has been developed from the concept of Earned Economic Income by the application of concepts drawn from the existing literature. The calculations and ledger entries involved are illustrated in the appendices.