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Title:Measuring Current Costs of Technologically Inferior Assets
Author(s):Sharp, Robert F.; Spires, Eric E.
Subject(s):Accounting standards
Abstract:Recent accounting standards require disclosures of current costs of fixed assets even when the owned asset has been superseded in the market by a technologically superior asset. Although four types of technological change are possible, the standards contain explicit rules for valuing only two types of change. Weil's valuation rules extend and improve upon the official rules by giving explicit recognition to the time value of technological differences. This paper suggests that Weil's rules can be further improved by giving greater attention to usability of technological differences and by considering relative risk in the selection of discount rates. The result of these modifications is a conceptually superior rule and two practical equivalents, each of which is applicable to any and all types of technological change.
Issue Date:1982-10
Publisher:Urbana, Ill. : College of Commerce and Business Administration. University of Illinois at Urbana-Champaign
Series/Report:BEBR faculty working paper ; no. 0908
Genre:Working / Discussion Paper
Rights Information:Copyright 1982 University of Illinois Board of Trustees
Date Available in IDEALS:2012-10-24
Identifier in Online Catalog:2186245

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