ABSTRACT
Accountants must inevitably be concerned with the economic substance of accounting information and how well such information serves the needs of both internal and external users. If our primary objective in accounting is to provide information that is useful for evaluation of decisions and of performance, for users both inside as well as outside the entity, then Baxter's Deprival Value Depreciation approach would seem to do the best possible job so far as depreciation is concerned. The classic Internal Rate Depreciation model has been a favorite substitute for the Arbitrary Formula model over the years. Like the Internal Rate Depreciation approach just considered, but unlike the arbitrary formula depreciation approach considered first above, the Earned Economic Income approach of R. John Grinyer assumes an interdependent complementary relationship between Depreciation Charges and his Earned Economic Income figure. Deprival Value Depreciation is, then, the write-down of the book value of an asset over its lifetime in accordance with deprival value concepts.
