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REFORMULATION OF THE CONCEPTS OF CAPITAL AND INCOME IN ECONOMICS AND ACCOUNTING.

Frank A. Fetter
The Accounting Review 1937 12(1), 3-12
Abstract This article seeks the role of capital and income in economics and accounting. Examination of a sample of current accounting literature discloses a much divided opinion as to the relationship between economic and accountancy concepts and theory. The general attitude of accountants seems to be that the economic concepts may be valid in their own field, but they can't be adopted and applied to accounting purposes. It should be observed that the close contact of accountants with the bard realities of business has made more difficult for them the task of formulating logical and consistent concepts for their own use. But, surely it is the highest duty of both accountants and economists, while meeting the legal and practical demands of the moments, to point the way towards true economic conceptions in the law instead of merely passively submitting to its sometimes blundering dictation. The primary and central problem of business and hence of accounting and finance, will always be income. Economists and accountants agree that income is something related to capital.

INADEQUATE DEPRECIATION METHODS.

E. A. Saliers
The Accounting Review 1937 12(3), 303-308
Abstract Perhaps no topic has been the subject of such wide differences of opinion as the method used, under given conditions, to make allowance for the expense which results from the disappearance of value of physical assets, commonly termed depreciation. These methods vary from those which result in a minimum charge to those which result in a maximum charge for any given period. Absolute uniformity in this respect is neither attainable nor desirable. Allowance must always be made for natural differences arising from geographical location, climate, and the character of the asset in question. Neither can the differences of opinion of individuals be entirely erased. Depreciation will long continue to be a controversial subject. By recognised opinion, however, much that is erroneous or dangerous may be eliminated from the list of proposed procedures. Methods which may be condemned are those which, if persisted in, result in financial embarrassment or bankruptcy as well as in gross inequality in treatment of the various parties interested in the progress of the enterprise.