Abstract The article considers how the choice of the method of write-off and investment tax credit affect the investment decisions of firms in the United States. There is a general agreement that the income tax policies of the federal government influence the type and the levels of investments made by corporations, subject to income tax. With no tax deduction the investor is indifferent between the long-and short-lived investments since they have equal present values. Balancing the possibility of misinterpretation is the fact that assuming there is a present tax liability there is less risk in a tax credit, or an immediate write-off, than with depreciation write-offs that require profitable operations in the future for the write-offs to be of value. One objective of this paper has been to question some of the conclusions of previous authors writing on the subject of depreciation, taxes and incentives to invest. To accomplish this objective accountants need to understand more completely the effects of the different possible tax provisions on the measures used by the businessman to make his decisions, and the effects on his attitudes towards making investments.

Abstract This article focuses on the 1964 Concepts and Standards Research Study Committee of the American Accounting Association, which aimed to expand and to amend in part the statement on realization in "Accounting and Reporting Standards for Corporate Financial Statements--1957 Revision." That statement says the essential meaning of realization is that a change in an asset or liability has become sufficiently definite and objective to warrant recognition in the accounts. In considering this statement, and realization principles generally, attention will be focused on the problems of asset recognition and valuation and revenue recognition. The committee concurs with the statement of the 1957 Revision that primary emphasis should be given to the use by investors of published financial statements in making investment decisions and in exercising control over management. The committee recognizes the difficulty of developing a definition of realization that will have general applicability. Nevertheless, four of the committee members feel there is sufficient significance in the difference between realized and unrealized changes in value to justify making the distinction.