The Accounting Review Vol. 12 No. 4 1937
ECONOMIC CONSIDERATIONS OF OBSOLESCENCE.
Abstract
This article focuses on the economic considerations of obsolescence. One often hears it said that obsolescence is essentially a modern problem, the result of increased rapidity of economic and social change. It is implied that events moved more slowly in the past so that articles remained in use until they were worn out. Brief reflection, however, is enough to show that this view is incorrect. The major changes of history have been accompanied by large-scale obsolescence of fixed capital. Take the case of the fall of the Roman Empire, the barbarians whose power succeeded that of Rome over large parts of the Empire had no use for many of the items of capital equipment which fell into their hands. Villas innumerable passed into decay. It must be realized that a practical difficulty stands in the way of making obsolescence charges during the lifetime of an undertaking whose rates are subject to public control. The development of railroads in new countries brought out this point. Private enterprise has never been backwards in assuming risks, providing only that the opportunity for gain was commensurate with the risk involved.
- DOI
- 10.2308/tar-7083471
- Volume
- 12
- Issue
- 4
- Pages
- 337-344
- Language
- en
- Sources
- openalex crossref