This article presents a study on the regulation, implied revenue requirements, and methods of depreciation in accounting in the U.S. The choice between flow-through and normalization accounting procedures, assuming accelerated depreciation is used for taxes, is not clear. The theory of accounting, if it is assumed that straight line depreciation is correct, points to increasing the early depreciation expense with the use of accelerated depreciation for taxes compared with the amount of expense if straight-line depreciation is used for taxes. However, in practice the issue is complicated by the fact that straight-line depreciation may not be correct, thus, the adjustment may actually be causing more errors.

This article presents a study on the implications to accounting of efficient markets and the capital asset pricing model in the U.S. If a proposed accounting procedure is theoretically superior to what is done in practice and if price observations indicate that the market is using it, then this can be used to support the contention that the superior practice should be used. With less than strong-form efficient markets and with the likelihood of a significant percentage of the market being fooled by faulty accounting practices, there is still a place for intrinsic value analysis.