Abstract Since the beginning men have been engaged in producing things necessary for subsistence and have been confronted with the problem as to what things to produce and how to produce them. As soon as several persons combined their efforts in production, there has been the problem as to what each should do and how the product should be distributed among them. The order or condition under which men decide and carry on their activities with reference to production and distribution characterizes an economy. An economy is said to be free when the members of a community, each according to his ability and situation, freely make decisions and carry on economic activities. In a social economy production is undertaken mostly by separately organized business enterprises which constitute the cells of the entire economic organism of society. Individuals take part in these business enterprises in various specialized capacities. Production is no longer for the direct consumption of persons participating in each business enterprise, but for sale to consumers or to other business enterprises which in turn produce for final consumption.

Abstract In view of the purpose and nature of business operation, the conventional cost theory of value stands well the test of logic and should be maintained. The disparity between cost and revenue caused by changes in the value of money does not Affect the validity of cost but gives rise to the problem of conversion of cost figures to the current dollar level. The primary purpose of conversion of cost is, therefore, to bring cost into identical dollars with revenue so that real income in the sense of increase of economic well-being may be reflected and that figures of cost and revenue may continue to be relied upon as barometers of operating efficiency. This being so, revenue which sets the limit to income need not be converted as sometimes recommended, except for purpose of comparison between periods. The accounting effect of cost conversion is a segregation from income of what represents, in the case of rising price levels, but a recovery of current dollar cost necessary to maintain the integrity of economic capital. Conversion of all forms of "investment" assets such as buildings, machinery, equipment and inventories is desirable for a correct statement of value of resources in terms of current dollars and incidentally also, placing the costs of successive acquisitions of assets, especially fixed assets, to homogeneous dollar nines as basis for cost computation.

Abstract The article focuses on the valuation of intangibles in business practices for the purpose of purchase and sale. There have been a large number of variable factors that have to be taken into account in the process. However, there are several general considerations which are to a greater or less extent taken into account in all case of valuation of intangibles. In buying a business with an established earning power in excess of what is considered ordinary in the particular line of industry, the purchaser expects to pay for the capitalized value of the estimated excess earnings which may be judged to continue for a fairly definite number of years. In computing this value, a number of factors have to be considered, like, the earnings of the concern; the value of investment or which a normal rate of income is to be allowed; normal rate of earnings for the industry concerned; the amount of the excess earnings that can be transferred; the number of years during which the transferable excess earnings may be expected to accrue; and the rate for capitalizing the excess earnings thus determined.