Publication Date

1966

Document Type

Dissertation/Thesis

First Advisor

Iliff, Kathryn (Professor of accountancy)||Avery, Clarence G.

Degree Name

M.S. (Master of Science)

Department

Department of Accountancy

LCSH

Railroads--Accounting

Abstract

The purpose of this study was to investigate the use of replacement accounting for the treatment of certain property assets by the railroad industry. Replacement accounting has long been considered an unacceptable practice by the accounting profession and, in this study, an attempt was made to point out some of the shortcomings of this technique by analyzing both its application and the support given to it by the Interstate Commerce Commission. The data for this investigation were obtained from the following sources: periodical literature and related studies; the Interstate Commerce Commission; and the financial statements of eight selected railroads. In view of the importance of the investor's market today, replacement accounting does not appear to reflect properly the periodic cost of using an asset because it disregards the functional or useful life of the asset. The acquisition cost is not allocated to future periods, as would be true under a depreciation accounting method. Under the replacement accounting ruling of the Interstate Commerce Commission, the railroad's investment in these particular assets is not properly presented. These assets would not only be given a more accurate treatment in the balance sheet if a depreciation accounting procedure were to be adopted, but a more reasonable measurement of periodic net income would also be provided.

Comments

Includes bibliographical references.

Extent

67 pages

Language

eng

Publisher

Northern Illinois University

Rights Statement

In Copyright

Rights Statement 2

NIU theses are protected by copyright. They may be viewed from Huskie Commons for any purpose, but reproduction or distribution in any format is prohibited without the written permission of the authors.

Media Type

Text

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