The article focuses on surrogates in income theory as proposed by researcher A.D. Barton. Barton's recent article on income theory contains several conceptual errors and incomplete analytical formulations, which negate the substance of certain conclusions. Barton's central theme is that both ex post and ex ante income concepts are needed for effective decision making. Barton introduces a collateral argument regarding the relationship between certain ex post and ex ante income concepts. Barton asserts that a rather lengthy tradition in the income theory literature is false. Specifically, Barton claims that certain current value measurement systems do not constitute even a potential surrogate for ex ante economic income. Barton's analysis misses the central point of this prior literature, substitutes assertion in place of the evidence called for by previous authors and obscures issues that were clarified carefully in past research. A major portion of Barton's conclusions rest on his examination of the relationship between asset market prices and net present values.

The purpose of this article is to explore the effect of productivity change on the divergence between historical cost income and income computed on a current replacement cost basis. Most discussions relating to changes in the established historical cost framework emphasize the impact of rapid inflation on differences between methods. However, simulation results indicate that changes in resource productivity also affect the relative magnitude of differences between methods. In other words, inflation is not the only variable that must be considered by policy makers in deciding whether to retain historical cost as the established accounting basis. The long-term significance of this to policy makers is that a potentially broad range of economic variables, productivity being one example, must be considered in analyzing accounting issues. Inflation is not the sole cause for differences among methods, and the broader economic dimensions underlying accounting policy choices must be recognized. A more immediate policy implication relates to the expected effect on productivity of emerging international cartels, natural raw materials depletion and other related supply-demand factors. Insofar as these factors tend to reduce secular productivity gains (or lead to productivity decreases), one can expect the relative differences among accounting measurement alternatives to widen.

Increasingly, attention is being focused on the usefulness of manpower information systems in the firm. The demand for this information emanates from three distinct levels. Level I: Manpower Information for Legal Compliance Decisions. The primary focus here is in developing information systems which provide necessary data for governmental units such as the Department of Health, Education, and Welfare, the Equal Employment Opportunity Commission, the Social Security Administration, and similar organizations which monitor employment practices, collect taxes, or engage in policy-making activities. Level 1I: Manpower Information as an Input to Manpower Planning. In this area, the objective is to provide management with data to be used in making numerous decisions regarding the allocation and pricing of human resources including recruitment, training, utilization, and termination. Level III: Manpower Information as an Input to the Valuation of Human Assets for External Reporting. Here, the objective is to provide independent information in the basic financial reports regarding heretofore unreported human assets possessed by the entity. While the accounting literature on human resources has dealt with all three levels of manpower information systems (e.g., see Picur [1973] and Flamholtz [1974]), most authors have given only cursory attention to the basic economic foundation underlying the existence of unrecorded human assets. Our purpose in this paper is to explore the economic and accounting assumptions underlying this literature and to develop criteria for the employee training conditions under which such assets might exist. In the economic literature, there already exists a reasonably well de-