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A Comparison of Alternative Methods of Estimating constant Dollar Depreciation.

Daniel G. Short

Associate Professor of Accounting, University of Texas, Austin. 1

The Accounting Review 1985

ABSTRACT: Previous research has questioned the use of COMPUSTAT capital expenditures data to layer fixed assets for the purpose of estimating constant dollar depreciation. This note compares the layering technique with the more popular alternative, the average age method. Estimated amounts were compared with actual data reported under FASB #33. The results indicate that the layering method provides estimates that exhibit less error, bias, and variance.

DOI
10.2308/tar-4506754
Volume
60 (3)
Pages
500-503
Language
en
Export
BibTeX
Sources
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