ABSTRACT
IT IS UNDOUBTEDLY true that the methods now in use for the systematic accounting for depreciation and many of the now generally accepted concepts of depreciation have a comparatively recent origin, and that much of the development of the subject has taken place since and as a result of the establishment of governmental regulation of public utilities and the enactment of income tax legislation. It would be difficult to believe, however, that the fundamental facts of depreciation— the exhaustion of capital investment due to the physical or functional exhaustion of service capacity and the necessity of recovering capital investment before any profit on a venture could be claimed—have not always been understood by those individuals who regularly engaged in business undertakings. If the records were available for inspection, one would expect to find evidence of some understanding of the phenomena of depreciation as far back in history as the origin of written records of business affairs.
