Abstract
The central result is an equality connecting accounting numbers with information. ln (1 ((income)/(assets)))=r_{f} I(X;Y), r_{f} is the risk free rate, ln is the natural logarithm, Y is the outcome of interest, X is the information signal about Y, and I(X;Y) is a Shannon information measure. The equality is derived using economic income accounting; it is shown to hold, under appropriate conditions, for declining balance and straight line depreciation methods. Some social welfare implications are explored.
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