Abstract The article presents the author's reply to researcher L.S. Revsine's rejoinder on the article "Expectations and Achievements in Income Theory." The author feels that Revsine's comments on the article are based upon a series of misconceptions and unsupported assertions. The author's article was primarily concerned with relationships between ex ante and ex post measures of periodic income and asset values and why both sets of concepts are required. It concluded that the case for current cost accounting cannot be made to rest on the hypothesis that current market prices of assets are reliable indications of the present values of those assets, except under tight conditions; rather, the justification for current cost accounting depends upon a set of other factors. The rejoinder does not challenge successfully the validity of any of the author's analysis. In his rejoinder, Revsine first asserted that the author stated that previous authors have ignored the excess of present values over current market prices of assets for all nonmarginal asset purchases.

Abstract This article presents information on expectations and achievements in income theory. A major confusion concerning the relationship between ex ante present value and ex post concepts of income and asset valuation underlies much of the recent literature in income theory and asset valuation. Many claims have been made in favor of the present value concepts and measurements as providing the ideal accounting system which are not valid, and many criticisms of historical accounting which are based on the supposed merits of present value accounting are not sound. The case for the use of current value or replacement cost accounting is thought by many to rest on the merits of present value accounting whereas it really rests upon other grounds. The case for the dominant position of ex ante present value income rests on the needs of investors for information about future income prospects of a firm. Investors in business enterprises, i.e., owners, are interested in the prospects of future income from investments, and it is differences in these future prospects which determine the allocation of their investment funds.

Abstract Reviews the book "Income and Value Measurement: Theory and Practice," by T.A. Lee.