[OPE-L:423] Re: abstract labor again

Paul Cockshott (wpc@clyder.gn.apc.org)
Sun, 5 Nov 1995 00:33:46 -0800

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The question that Mike has raised about how to account
for the fall in the replacement cost of capital equipment
due to technical change is of course something that has
worried the accountancy proffession, certainly in this
country, hence the preference for using replacement
rather than historic cost in valuing stock.

I am unaware just how the BEA in the US arrive at their
figures for the capital stock at replacement cost. If it
is drawn from companies own accountants estimates, it should
take into account technical change. Perhaps you could clear
up how they actually do it?

As to his second question on the software engineers, this
is obviously more general an relates to the question of
shared overheads. Similarly how does one account for the
cost of track maintainance in a railway system carrying
both freight and passengers?

I would suggest that a sensible approach is to divide the overheads
pro-rata with the prime costs.