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Demonstrates the alignment of capital maintenance concepts with Hicks' income definition, indicating discussions on inflation-adjusted income are oversimplified.
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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Lawrence Revsine (1981) studied this question.
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