[OPE-L:844] Re: Valuation Of Inputs

Paul Cockshott (wpc@clyder.gn.apc.org)
Wed, 24 Jan 1996 13:46:41 -0800

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Is the following an uncommon scenario?

Let's say that a firm replaced its morally-depreciated 386SX computers
year ago with 486DX2/66 computers estimating, when they purchased the
new machines, that they would have an effective "work life" of three
years taking into account estimated future moral depreciation. It is
now January, 1996. Does that firm now go into the marketplace and
purchase Pentium 120s? Not necessarily. Wouldn't you agree?

Probably not, but its accountants write them down to taken into
account the decline in resale value.

This is a loss on the capital account.