Concept Of Depreciation Research Articles

The problem of assessing the liquidation value for the depreciation accounting

The transformation of accounting standards in 2022 is aimed at the convergence of domestic accounting standards with international financial reporting standards, changes the composition of fixed assets and the accounting procedure for depreciation of fixed assets. The study examines the issue of assessing the liquidation value of an object of fixed assets for the purposes of reproduction of fixed assets at the expense of depreciation charges. The object of the study is the objects of fixed assets for accounting. The subject of the study is the liquidation value of an object of fixed assets for the purposes of accounting for depreciation charges. The purpose of the study is to present the procedure for assessing the liquidation value of an object of fixed assets for accounting purposes. Research objectives: 1. Theoretical analysis of scientific literature and publications; 2. Study of normative, methodological and legislative acts of the subject area of research; 3. Formulation of objective and scientifically based research results. The research methodology is a subject–conceptual approach based on general scientific accounting methods. Research results: 1. The types of cost of fixed assets are disclosed; 2. The content of the liquidation value of the fixed assets is disclosed; 3. The concept of depreciation as a source of reproduction of fixed assets is disclosed; 4. The method of assessing the liquidation value of the fixed assets is presented.

ЕВОЛЮЦІЯ НАУКОВОЇ ДУМКИ ЩОДО СУТНОСТІ АМОРТИЗАЦІЇ ТА ЇЇ ЗНАЧЕННЯ В АМОРТИЗАЦІЙНІЙ ПОЛІТИЦІ ПІДПРИЄМСТВА

The article examines the economic category of “depreciation” in the works of scientists and regulations: different positions, approaches, concepts, aspects and options. The main shortcomings about the role of depreciation in modern business conditions are emphasized: 1) neglect of the importance of the process of depreciation of fixed assets in the enterprise; 2) mixing the concepts of “depreciation”, “depreciation deductions”, “wear”; 3) appropriation of depreciation of functions not peculiar to it. There are eight main positions in the works of scientists about the economic essence of depreciation, but none of these positions corresponds to the role of depreciation in modern conditions. The main approaches to the interpretation of depreciation by scientists are as follows: 1) depreciation – a monetary expression of depreciation of fixed assets; 2) depreciation – the process of transferring the cost of depreciation of fixed assets to the cost of production; 3) depreciation – the method of accounting; 4) depreciation – an investment resource and a means of accumulating funds for further renewal of means of labor. The variety of approaches to the interpretation of the term “depreciation” made it possible to systematize and combine certain approaches in the concept of depreciation. The main conceptual and specific approaches the author considers the legislative, classical, including economic and accounting, as well as tax. The classical approach is based on the concept of depreciation and impairment of fixed assets, reimbursement of their value and reproduction. Based on the analysis of concepts and aspects of depreciation, a new approach to determining the nature of depreciation under market conditions has been formed.. Today, depreciation of fixed assets is an interactive tool for strategic management and optimization of the tax potential of the enterprise

Spatial and temporal impacts on building depreciation

ABSTRACTThis article explores the relationship between new housing and the existing housing stock in terms of an urban market value hierarchy, considering the importance of the concept of depreciation, as influenced by three factors: the age, location and quality of the building. Based on a sample from the Almond area of Madrid City Centre, the research considers many variables and applies an adapted appraisal approach termed differential depreciation to analyse the evidence of real estate values and the influence of spatial and temporal location factors. The study of the role of depreciation in the value of housing used in this research provides researchers with objective criteria on the functioning of the urban land market. This shows that the relationship between depreciation and the need for renovation is not linear, but instead follows identifiable patterns linked to the era of construction rather than solely the age of the building.

The interplay between law and accounting in the conceptualization of depreciation in Spain (1885–1939)

This research studies the emergence of the concept of depreciation in Spain up to 1939, identifying the interplay between law and accounting. We focus our analysis on the hypotheses of both Watts and Zimmermann (1979) and of Napier and Noke (1992). Our intention is to fulfil this dual task of retrieval and reinterpretation of the origins of depreciation in Spain, in order to analyse the concerns over the importance of implementing depreciation policies and the role played by accounting thinkers and legal regulations in the adoption of Spanish accounting depreciation. We find no evidence for the market-for-excuses hypothesis and, in contrast to the conclusions of Watts and Zimmermann (1979), it seems that the change in accounting theory appeared before rather than after changes to the law. This interplay fits with Napier and Noke’s hypothesis of a multidirectional process in which each discipline affects and influences the other.

Depreciation of Goodwill: Law and Economics Perspective

The paper discusses the concept of Depreciation of Goodwill under S. 22 of Canada's Trade-marks Act from a law and economics perspective.

REVIEWS

Book reviewed in this article: Australian Company Mergers 1946–1959. By J. A. Bushnell. Theory of Industrialism. By J. Akerman. Lund Social Science Studies 19. Information and Investment. A Study in the Working of the Competitive Economy. By G. B. Richardson. Honey, Growth and Methodology and Other Essays in Economics. Edited by H. Hegeland. Concepts of Depreciation. By L. Goldberg. Theories of Economic Growth. Edited by B. F. Hoselitz. An Econometric Model of the United Kingdom. By L. R. Klein, R. J. Ball, A. Hazlewood and P. Vandone.

General Theory of Plant Account Subject to Constant Mortality Law of Retirements

WITHOUT GETTING INTO a detailed discussion of the ramifications of the concept of depreciation, it should be recalled that depreciation is based to a great extent upon the degree of loss of the service capacity of physical property. Where a plant account consists of property of the same type, such as electric meters, transformers, underground cable, etc., certain types of mortality laws are found to apply to the retirements from the account and when this is true it is possible to determine by well-known actuarial processes the expectation of life of this property at different ages. The variation of this expectation of life from age to age offers a basis for determining loss in service capacity of the property in question. Methods of estimating accrued depreciation, however, not only take into account loss in expected service capacity, but also are influenced by the accounting problem of amortizing the original plant investment over the life of the plant in a reasonably simple manner. The problem of determining depreciation of a plant is thus unavoidably composed of two elements: (1) Determination of variation of expected service capacity of plant in time, relative to expected service capacity when new; (2) the effect of such variation upon a simple and reasonable program of amortization. In this article certain aspects of the first element of the problem are considered; namely, the behavior of plant balance in relation to gross additions and retirements, under operation of a constant mortality law of retirement. The significance of these relationships lies in the effect they have upon the age distribution of the plant account at a given time, and the fact that knowledge of the age distribution and mortality law determines future expectation of life of plant at the time in question, relative to expectation of life when new, thus offering a basis, in many cases, for determination of relative loss in service capacity of plant. For example, a mortality law which can be approximated by

The Economic Life of Industrial Equipment

WHEN TO REPLACE individual units of durable equipment by similar or improved units is one of the main problems, upon which the success of industrial enterprise depends. Nevertheless, no unified presentation of its many aspects appears to have been published up to the present. The principal writers refer to replacement merely incidentally, when discussing the subject of depreciation. From the theoretical point of view, such an approach really amounts to putting the cart before the horse.' Replacement is the basic problem, because it actually affects the composition and productivity of a plant. Calculations of depreciation are mere figures entered into books, the significance of which depends entirely on the use to which they are put. The concept of depreciation does not enter into the theory of capital value at all. In practice, on the other hand, differences in depreciation methods do to some extent influence the judgment of traders in the negotiable symbols of composite capital goods. This anomaly is due partly to defective accounting methods. A study of the replacement problem by itself must precede attempts to correct the situation. The value aspect of replacement or arises from the familiar phenomenon that many types of machines outlive their usefulness. The income stream derived from their operation gradually declines, until a more attractive alternative becomes available. The theory that the economic life of a machine is a period which makes the unit cost (plus interest) of the product a minimum, appears to have been originated by Professor J. S. Taylor.2 His algebraic presentation was simplified and refined by Professor Harold Hotelling,3 who employs continuous functions for the purpose. The basic formula given by the latter writer is:4

Measurement of Obsolescence of Capital Goods

RT HE principal objective of this paper will be the suggestion of methods by which obsolescence, exclusive (in so far as it is possible) of all other categories of depreciation, may be measured.2 Following general comments on the nature of a procedure for calculating obsolescence, there will be statements about the means of measurement of several different cases of obsolescence. Next, there will be comments on determination of the time when an improvement will displace installed equipment. No especial attention will be given the general economic issues of technological unemployment; wage, income, and output matters; demand characteristics of the product or products; or differences in the opportunities of competitors. The paper will be devoted, therefore, to measurements of obsolescence of a piece of equipment, particularly a single firm's equipment, or, at the most, of capital goods of a single industry. Because the concepts of depreciation and obsolescence of capital goods are subject to a variety of interpretations, definitions of them are needed. Depreciation of capital goods, therefore, is arbitrarily defined as the decline, anticipated or unanticipated, in their value for any reason. Obsolescence is defined similarly as the decline, anticipated or unanticipated, in the value of capital goods because of the economies or profitability of technological changes, a secular decrease in the demand for the products produced with the assets, or governmental policy. The succeeding algebraic expressions, however, present means of measuring what