[OPE-L:7885] Re: Re: accounting for value

From: Tony Tinker (TonyTinker@msn.com)
Date: Fri Nov 01 2002 - 10:22:23 EST


  A couple of issues come to mind:
  a) are the conventional rules and practices for the valuation of constant fixed 
  capital by firms  the same as that used in national income accounting?  First, remember that 'constant capital' is not a category in traditional accounting; we might 'reach' for a connection to 'Fixed Capital', but we need to be wary in doing that.  In conventional accounting, the valuation rules are quite different (and somewhat diverse, but they often begin with historical cost).
  How can those accounts or conventional accounting rules account for
  the release and tying-up of value and moral depreciation?  There are a variety of approved depreciation methods (straight line, sum-of-the-years-digits, accelerated, etc), that are guided by concerns about capturing the declining use value (profit production) and also -- importantly -- verifiability/ intersubjectivity.  Is there a 
  'conventional' norm for estimating depreciation of constant fixed capital,
  such as 'straight-line' depreciation, or are there instead many different
  ways of accounting for depreciation?  See above. 
  b) national income accounting doesn't account for the income received
  by undocumented workers and other workers who work (wholly or
  partially) off-the-books.  Yet, it seems to me that firms that employ
  workers who work 'off-the-books' have to for their own purposes account 
  for these funds even though they don't show on the official firm books. 
  This would suggest that these firms keep two sets of books: one official 
  and one more accurate. It is much easier to fold such items into one set of books, by employing a 'relabelling' of expense items.  A bribe, for instance, might be expensed as 'consulting fee'. Yet, obviously the official government accounts 
  can not include reliable estimates for 'the underground economy' even 
  though this may be in fact be a significant (in some countries, the
  leading) sector in the economy).  This also is an issue in terms of
  calculating productive and unproductive labour since from a Marxian
  perspective the legal status of workers in terms of whether they work
  on or off the books is not a criteria in terms of whether they are or are
  not productive of surplus value. Agreed.  I'm so glad we didn't have to have that discussion!  Yet,  who has attempted to estimate
  the quantity of workers so employed and  then integrate those estimates
  into Marxian empirical work on value?  You will find plenty of work in the critical accounting community that shares these concerns, but few would share the kind of 'bookkeeping-centric' idea of accounting that your comparisons and discussion betrays.   For instance, I've just accepted for publication in The Accounting Forum (our 'other' journal) an article called "The Global Audit", that explores the possibilities of accounting in 'accounting for immigration' (especially, the ways accountants already do -- and might -- participate in the politics of immigration).  Now, the kinds of services large accounting firms provide in this area cannot be understood in an 'account-centric' manner.  These days, most big firms are self-described as being in the 'assurance' (risk reduction) service business.  This extends to any information (financial and otherwise) that may reduce risk (and thus, ceterus paribus, increase return).  Hence, they offer human rights audits, environmental audits, etc. as assurance services.  

  Fraternally,  Tony Tinker

This archive was generated by hypermail 2.1.5 : Sat Nov 02 2002 - 00:00:01 EST