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THE VALUATION OF FIXED ASSETS IN THE FINANCIAL ACCOUNTS OF UK NATIONALISED INDUSTRIES AND THE IMPLICATIONS FOR MONITORING PERFORMANCE: A COMMENT
Author(s) -
Davies J.R.,
McInnes W.M.
Publication year - 1982
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1982.tb00991.x
Subject(s) - valuation (finance) , economics , actuarial science , fixed asset , financial economics , business , finance , microeconomics , production (economics)
This comment on the paper by MacArthur (1980) focuses on the conceptual problems of valuing assets when technological progress results in more efficient assets becoming available. MacArthur concluded that if valuation is undertaken on the modem equivalent asset basis it will not be possible to use the current cost income statements to identify the use of inefficient technology. In this comment it is argued that MacArthur's conclusion does not hold if a valuation basis consistent with the logic of economic analysis is employed.