The article clarifies the complexities of the conceptual differences in the methods used to define or measure current value depreciation. Since depreciation is but one aspect in the total problem of income measurement, a brief examination of the purposes or uses of periodic income should be beneficial. The authors, within the confines of the purposes of income, attempt to clarify the concept of depreciation. Finally, given certain information about present prices and changes which have occurred in the structure of prices, a conceptual method for determining depreciation and other related factors affecting asset value changes will be illustrated. Income must be defined before it can be appropriately measured. Therefore, any definition of income must be based upon the intended usage of information generated. The user cost approach, while fundamentally different from replacement-value accounting, must be consistent with some measure of capital maintenance. Dependence upon subjective measurements such as present value of discounted services or estimated minimum cost per unit of output applicable to technologically improved assets is avoided.

Reviews the book "Introduction to Managerial Accounting: A Business Game," by Kenneth R. Goosen.

The article explores the problem concerning income tax carryforward benefits arising from net operating losses. The theoretical construct underlying income tax allocation is the matching concept. However, conservatism takes precedence over matching where tax benefits stemming from loss carryforwards exist, except in the case of virtual certainty of realization. But carryforward benefits are a valuable asset. They can be realized through profitable operations or sale of the firm. When accompanied by the presence of deferred credits stemming from accelerated tax depreciation, conservatism relative to carryforwards becomes even more arduous.

The article suggests an improvement in the accounting field of mix variance. Mix variances arise when factor input combinations of raw materials or grades of labor differ in composition from the standard mix. It is also used to analyze sales or contribution margin when actual mix differs from budgeted mix. The primary intention is to propose a different structure of raw material variances where the standard mix is intentionally abandoned in the short-run due to raw material price changes, causing a different combination to be optimal. Criticism of the mix and yield variances and proposed recasting for the above situation follows the first portion of the paper which is devoted to the planning function. In terms of the planning-performance- control cycle, if output can be attained with different mixes of materials inputs, decisions can be implemented by means of mathematical models such as linear programming. In conclusion, it is apparent that the traditional materials mix and yield variances suffer from an advanced case of technological obsolescence.