ABSTRACT
This chapter discusses Ker’s contribution to the late Nineteenth Century debate on depreciation. Depreciation accounting has remained a vexed issue, and Ker’s contribution is important for its views and approach at a time when the accountancy profession, Parliament and industry were most undecided as to its benefits and disbenefits in financial reporting. The chapter is an attempt to discover principles underlying professional practice, and the decisions of the Courts in regard to deductions from profits for depreciation. Buildings deteriorate in time, but the period is so long that annual depreciation of buildings kept in repair is practically nil. Before the 1878 Act was passed, deductions for depreciation of buildings, plant, and machinery were disallowed in respect that such deduction represented a loss of capital. The 1878 Act modified the law to the extent of allowing the capital lost by depreciation of machinery and plant to be deducted. Renewals are a charge to profits of the nature of a depreciation allowance.
