115:
Most recently, the
International Public Sector Accounting Standards Board has discussed deprival value (and its application to liabilities under the 'relief value' model) in a Consultation Paper issued as part of its project to develop a Conceptual Framework for General Purpose Financial Reporting by
47:
Deprival value is based on the premise that the value of an asset is equivalent to the loss that the owner of an asset would sustain if deprived of that asset. It builds on the insight that often the owner of an asset can use an asset to derive greater value than that which would be obtained from an
38:
The deprival value of an asset is the extent to which the entity is "better off" because it holds the asset. This may be thought of as the answer to the following questions, all of which are equivalent: - What amount would just compensate the entity for the loss of the asset? - What loss would the
75:
Critics of deprival value assert that it is more complex than other measurement bases. Its use may also give rise to values that differ significantly from market values. Comparison between the values of assets owned by different entities may be difficult where deprival value is used because it
51:
Deprival value reasons that the maximum value at which an asset should be stated is its replacement cost as, by definition, the owner can make good the loss arising from deprival by incurring a cost equivalent to replacement cost. However, if that amount is greater than the amount that can be
107:
Although the extent to which deprival value contributed to the failure of attempts to introduce inflation accounting is debatable (see
Tweedie and Whittington for a review) there is no doubt that interest in deprival value subsequently declined. It was, however, endorsed in 1999 by the UK
52:
derived from ownership of the asset, it should be valued at no more than its recoverable amount. Recoverable amount is, in turn, defined as the higher of net selling price and value in use, which is the present value of the future returns that will be made by continuing to use the asset.
103:
During the 1970s deprival value played a major role in the development of accounting in times of inflation, being endorsed by official reports in the UK, Australia, New
Zealand and Canada Deprival value also formed the basis of the disclosures required in the United States by SFAS 33.
66:
An important practical implication of deprival value reasoning is that many assets will be stated at replacement cost, as entities tend to hold and use assets that they can employ profitably and dispose of those that they cannot.
34:
accounting. Some writers prefer terms such as 'value to the owner' or 'value to the firm'. Deprival value is also sometimes advocated for liabilities, in which case another term such as 'Relief value' may be used.
100:
and Parker and
Harcourt influenced a generation of accounting scholars. In his 1975 work, WT Baxter seems to have been the first to use the term 'deprival value'.
48:
immediate sale. For example, a machine may be profitably employed in a business but no more than scrap value could be obtained from its sale (net selling price).
96:(1961) was hugely influential in emphasising the difference between entry and exit values and making the case for replacement cost. Articles by
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reflects the position of the reporting entity. Critics also point out that the calculation of value in use is difficult and may be subjective.
366:
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entity sustain if deprived of the asset? - How much would the entity rationally pay to acquire the asset (if it did not already hold it)?
194:
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217:(Cambridge University Press, 1969). Also in the second edition edited by Parker, Harcourt and Whittington (Phillip Allan 1986).
404:
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is a concept used in accounting theory to determine the appropriate measurement basis for assets. It is an alternative to
409:
254:
Committee of
Inquiry into Inflation and Taxation, Australian Government Publishing Service, 1975. (The Matthews Report)
142:
399:
137:
23:
352:
289:
Statement of
Financial Accounting Standards No 33 Financial Reporting and Changing Prices
185:
The theory and measurement of business income’ (The Irish
Accounting Review, Summer 2008)
266:, New Zealand Government Printer, Wellington, 1976. (The Richardson Committee Report)
175:
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31:
393:
349:
Consultation Paper: Measurement of Assets and
Liabilities in Financial Statements
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The origin of deprival value is frequently ascribed to JC Bonbright's 1937 work
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Deprival value equals the lower of replacement cost and recoverable amount; and
132:
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and has featured in recent collections of articles on accounting measurement.
27:
242:
Her
Majesty's Stationery Office, London, 1975. (The Sandilands Report)
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Recoverable amount is the higher of net selling price and value in use.
119:
The methodology has been applied to electricity sector regulation in
374:. Wellington, New Zealand: NZ Institute of Economic Research (NZIER)
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Inflation
Accounting: Report of the Inflation Accounting Committee
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The Report of the Committee of Inquiry into Inflation Accounting
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1961. For a modern appreciation see Geoffrey Whittington's ‘
328:
The Routledge Companion to Fair Value and Financial Reporting
201:, edited by Morton Backer (Prentice-Hall, New Jersey 1966)
197:"Economic and Accounting Concepts of Cost and Value" in
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International Public Sector Accounting Standards Board
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http://www.ifac.org/Guidance/EXD-Details.php?EDID=0150
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Special Issue: International Accounting Policy Forum
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Government of Ontario 1977. (The Alexander Report)
215:
Readings in the Concept & Measurement of Income
183:What the Old Guys can Tell Us: Edward and Bell's
315:Statement of Principles for Financial Reporting
179:"The theory and measurement of business income"
110:Statement of Principles for Financial Reporting
336:Wanted: Foundations of Accounting Measurement
94:The Theory and Measurement of Business Income
8:
365:Gale, Stephen; McWha, Vhari (August 2000).
334:Accounting and Business Research (2007);
330:edited by Peter Walton (Routledge 2007);
276:Committee on Inflation Accounting, Report
300:David Tweedie and Geoffrey Whittington
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287:Financial Accounting Standards Board,
368:The origins of ODV — Report to Air NZ
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302:The Debate on Inflation Accounting
108:Accounting Standards Board in its
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304:(Cambridge University Press 1984)
163:"Accounting Values and Inflation"
383:ODV is optimized deprival value.
80:History and current developments
228:Accounting Values and Inflation
252:Report: Inflation and Taxation
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313:Accounting Standards Board,
71:Criticisms of deprival value
16:Concept in accounting theory
338:(Abacus Vol. 40, No 1 2010)
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199:‘Modern Accounting Theory’
143:Mark-to-market accounting
86:The Valuation of Property
116:Public Sector Entities.
43:Deprival value explained
213:to Parker and Harcourt
405:Real estate valuation
351:, 2010 (available at
174:Edgar O Edwards and
410:Valuation (finance)
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138:Historical cost
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98:Solomons, David
88:. Edwards and
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24:historical cost
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165:1975, page 126
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32:mark to market
20:Deprival value
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326:For example:
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55:In summary:
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376:. Retrieved
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211:Introduction
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226:WT Baxter "
121:New Zealand
394:Categories
378:2021-03-20
161:WT Baxter
149:References
133:Fair value
28:fair value
127:See also
400:Pricing
317:, 1999
230:" 1975
372:(PDF)
90:Bell
26:and
92:'s
30:or
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