Re: [OPE] replacement cost and historical cost (again)

From: 이채언 <>
Date: Thu Sep 03 2009 - 21:33:40 EDT

As to Philip Dunn's argument;

Past accountings cannot be adjusted in the future, by definition, and so the moral depreciation could not be retrospective, I think.
In the given example, the fourth depreciation would be 40% (not 20%) inclusive of the moral depreciation of 20%. The fifth year depreciation is executed in advance. If a thing is depreciated in ADVANCE, we call it morally depreciated.


보낸 사람: []이(가) Philip Dunn [] 대신 보냄
보낸 날짜: 2009년 9월 4일 금요일 오전 4:45
받는 사람: Outline on Political Economy mailing list
제목: RE: [OPE] replacement cost and historical cost (again)

On Thu, 2009-09-03 at 00:14 +0100, GERALD LEVY wrote:

> Hi Phil:
> And how would you numerically illustrate an unanticipated rate of
> depreciation due to technological change creating new, more advanced
> and qualitatively different forms of constant fixed capital?
> In solidarity, Jerry

Easy peasy.

Suppose a firm buys a machine and anticipates it will last for five
years. Suppose revenue is anticipated to flat for the five years. Then
depreciation would be set at 20% per annum. However, a new, much
improved machine appears on the market after four years. The firm
decides to scrap the old machine and buy the new one. Retrospective
depreciation is now 25% per annum. The account of the four prior years
must be adjusted, reducing value added and profit.

Moral deprecations is prior period adjustment.

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