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Financial Cost Allocations: A Game-Theoretic Approach.

Jeffrey L. Callen

Assistant Professor of Finance and Business Economics, McMaster University. 1

The Accounting Review 1978

Abstract Arthur L. Thomas has argued that financial cost allocations in general and depreciation allocations in particular are arbitrary and incorrigible whenever the firm's revenues are generated by interacting assets. The game-theoretic Shapley technique is applied to the net-revenue-contributions approach to depreciation allocations. The resulting allocations, it is maintained, are non-arbitrary and corrigible if statement users and the accounting profession are willing to accept a constitution of three "reasonable" allocation axioms.

DOI
10.2308/tar-4492459
Volume
53 (2)
Pages
303-308
Language
en
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