From: Philip Dunn (hyl0morph@YAHOO.CO.UK)
Date: Wed Apr 04 2007 - 14:59:54 EDT
On Wed, 2007-04-04 at 12:40 -0400, glevy@PRATT.EDU wrote: > > I agree that the actual extent of moral depreciation is only known ex > > post. But how is it to be known? > > Hi Phil: > > Do you mean 'How is it known ex post?'? It would show up on a firm's > balance sheets, I guess. How this is aggregated to account for a total > figure (i.e. loss in capital values due to moral depreciation) for the > macroeconomy is another question. Some of it might show up as the > difference between Gross National Product (GNP) and Net National Product > (NNP)? [Jurriaan and/or Michael might know more about that.] > > > I would depreciate according to revenue > > over the actual life of the asset. How would you do it? > > That sounds like a micro question. I'm not in the habit of giving firms > accounting advice, nor am I qualified to do so. I think the point is that > they _must_ employ some "rule of thumb" since they can't _know_ ex ante > the rate of moral depreciation but they -- and we -- _must also_ recognize > that _whatever_ rule of thumb they use is inadequate in the presence of > accelerated technological change. In other words, they can try as best > they can to anticipate the unpredictable yet recognize that they can't > really anticipate the unpredictable. It's a gamble -- they (firms) put > their money down (on constant fixed capital) and they take their chances. > > > In solidarity, Jerry I haven't been clear enough. The question is how, ex post, to distribute value transfer over the life of an asset for the purposes of value accounting. If we have no way of doing that we are unable to draw up ex post value accounts. ___________________________________________________________ All new Yahoo! Mail "The new Interface is stunning in its simplicity and ease of use." - PC Magazine http://uk.docs.yahoo.com/nowyoucan.html
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