Depreciation and Obsolescence in the Context of Natural Resource Accounting

Michael Harris

No 57886, 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia from Australian Agricultural and Resource Economics Society

Abstract: Conventional national accounting practice emphasises depreciation as both a physical loss in productive capital and an economic loss due to obsolescence. This emphasis is only partially paralleled in prescriptions for natural resource accounting, where resource depletion is typically treated as “physical capital depreciation”. Depreciation resulting from obsolescence—and thus relative price changes rather than physical wastage—does not feature in resource accounting. The question is, what (if anything) does a consideration of obsolescence imply for work in resource accounting? What price changes should be incorporated into revised accounts, and when are they distinct from capital gains/losses? What is the connection between obsolescence and productivity change? What “counterfactual” should apply for renewable resources? This paper contains some tentative explorations of these questions.

Keywords: Land Economics/Use; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 16
Date: 2003-02
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare03:57886

DOI: 10.22004/ag.econ.57886

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