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June 15, 2026Journal of Management Accounting Research

Accounting for replacement investments.

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Authors

JBJonathan D. BiermanHJHarold Bierman Jr.

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Implication

Demonstrates inconsistencies in accounting for replaced assets when their economic value exceeds book value, suggesting improved practices.

Key Points

  • The aim is to analyze the discrepancies in conventional accounting practices for asset replacement decisions. It highlights how these practices can misrepresent financial realities when economic value is considered.
  • Evaluated conventional accounting approaches to asset replacement.
  • Analyzed the relationship between economic value and book value of assets.
  • Discussed implications for accounting practices in various contexts of asset replacement.
  • Outlined how writing off assets upon replacement can lead to misleading financial statements.
  • Demonstrated that accounting practices should consider economic value, especially when it meets or exceeds book value.
  • Argued for a shift in accounting standards to better reflect the economic realities of asset management.

Cite This Study

Bierman et al. (1993) studied this question.

synapsesocial.com/papers/6a2f975ea1cfeec4908287b4https://doi.org/10.2308/jmar-9701211540
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1REPLACEMENT COST: MEMBER OF THE FAMILY, WELCOME GUEST, OR INTRUDER?1962
  2. 2Replacement-Value Accounting.1967
  3. 3Should Replacement-Cost Changes Be Included in Income?1980
  4. 4Technological Changes and Replacement Costs: A Beginning.1979
  5. 5Replacement Cost: A Historical Look.1966