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March 18, 2026The Accounting Review0 citations

A Capital Maintenance Approach To Income Measurement.

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LRLawrence Revsine

Key Points

  • The aim is to clarify how capital maintenance concepts relate to income measurement under historical costs and inflation accounting alternatives.
  • Utilized a simple example to demonstrate capital maintenance concepts.
  • Compared historical cost income with four inflation accounting alternatives.
  • Analyzed conformity with Hicks' classical income definition.
  • Each capital maintenance concept aligns with Hicks' income definition.
  • Demonstrated that discussions on true inflation-adjusted income lack nuance.
  • Illustrated the complexity underlying income measurement.

Abstract

Abstract ABSTRACT: This paper uses a simple example to isolate the underlying capital maintenance concepts that are associated with historical cost income and four widely discussed inflation accounting alternatives, The approach illustrates that each of these concepts conforms to Hicks' classical income definition and thus demonstrates why discussions of "true" inflation-adjusted income are oversimplified.

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Cite This Study

Lawrence Revsine (1981) studied this question.

synapsesocial.com/papers/69ba44654e9516ffd37a60b3https://doi.org/10.2308/tar-4482689
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