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A Comparison Of Depreciation Methods Under Current Cost Accounting

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  • Davey, L.E.

Abstract

In New Zealand the Richardson Report has recommended to government the adoption of a form of inflation accounting known as Current Cost Accounting (CCA). This paper reports research carried out to determine which of the traditional historical cost depreciation methods used in farm accounting might be most appropriate when adapted to a current cost basis. The current cost depreciation methods are compared on the basis of their ability to predict accurately actual replacement values for a survey sample of farm tractors and headers. The resultant measures of depreciation are compared with those currently allowable under New Zealand taxation laws, and the proposition that investment allowances on purchases of new machinery offset the inadequacies of historical cost depreciation is discussed.

Suggested Citation

  • Davey, L.E., 1979. "A Comparison Of Depreciation Methods Under Current Cost Accounting," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 23(1), pages 1-11, April.
    • Handle: RePEc:ags:ajaeau:22600
    DOI: 10.22004/ag.econ.22600
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    References listed on IDEAS

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    1. Sidney Davidson & David F. Drake, 1961. "Capital Budgeting and the "Best" Tax Depreciation Method," The Journal of Business, University of Chicago Press, vol. 34, pages 442-442.
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    Cited by:

    1. Rose, Roger N., 1980. "A Comparison Of Depreciation Methods Under Current Cost Accounting: A Comment," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-3, April.

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    Agricultural Finance;

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