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A Note on the Cash-Flow Approach to Valuation and Depreciation of Productive Assets

Published online by Cambridge University Press:  19 October 2009

Amir Barnea
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Extract

In his famous 1964 article, Paul A. Samuelson [1] presents what he calls “the only sensible definition of depreciation,” namely, the period change in the present value of future cash flows expected to be generated by an asset.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 7 , Issue 3 , June 1972 , pp. 1841 - 1846
Copyright
Copyright © School of Business Administration, University of Washington 1972

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References

[1]Samuelson, Paul A. “Tax Deductibility of Economic Depreciation to Insure Invariable Valuation.” Journal of Political Economy, December 1964.CrossRefGoogle Scholar
[2]Lutz, Fredrick, and Lutz, Vera. The Theory of Investment of the Firm. Princeton: Princeton University Press, 1951.Google Scholar
[3]Goldschmidt, Y., and Smidt, S.. “Valuing the Firm's Durable Assets for Managerial Information.” Accounting Review, April 1969.Google Scholar
[4]Mount, T. R. “An Analysis of Product Behavior Incorporating Technical Change.” Ph.D. diss., University of California at Berkeley, 1970.Google Scholar
[5]Smith, Vernon L.Investment and Production. Cambridge, Mass.: Harvard University Press, 1961.Google Scholar
[6]Thomas, Arthur L. “Discounted Services Again: The Homogeneity Problem.” The Accounting Review, January 1964.Google Scholar
[7]Thomas, Arthur L. “The Allocation Problem in Financial Accounting Theory.” Studies in Accounting Research, No. 3, American Accounting Association, 1969.Google Scholar