University of Illinois Urbana-Champaign

Measuring Current Costs of Technologically Inferior Assets

Sharp, Robert F.; Spires, Eric E.

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https://hdl.handle.net/2142/34800

Description

Title
Measuring Current Costs of Technologically Inferior Assets
Author(s)
  • Sharp, Robert F.
  • Spires, Eric E.
Issue Date
1982-10
Keyword(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Recent accounting standards require disclosures of current costs of fixed assets even when the owned asset has been superseded in the market by a technologically superior asset.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.
Publisher
Urbana, Ill. : College of Commerce and Business Administration. University of Illinois at Urbana-Champaign
Series/Report Name or Number
BEBR faculty working paper ; no. 0908
Type of Resource
text
Language
en
Permalink
http://hdl.handle.net/2142/34800
Copyright and License Information
Copyright 1982 University of Illinois Board of Trustees

Owning Collections

Faculty Working Paper - Bureau of Economic and Business Research PRIMARY