The paper presents a novel ex post income concept, called Earned Economic Income (EEI), which would provide periodic accounting signals that are consistent with those derived from Net Terminal Value (NTV) analyses. EEI assigns interest adjusted NTV to the periods in which it is earned. The allocation is made via the apportionment of interest adjusted original cost. Inflation adjusted and monetary EEI figures are identical, so that the concept provides an integrating framework for interest adjusted inflation accounting and historical cost matching approaches. In developing the model the paper discusses the significance of conceptual models and of Economic Income (EI).

In recent years, Egypt has been developing rapidly from a socialist to a fully developed market-based economy. One may expect that this economic transition towards a more capitalist orientation will influence the country's cultural and socio-economic environment, and consequently the behaviour of its corporate managers. The increasing separation of ownership and control of capital could be expected to increase agency problems associated with managerial decisions. In these circumstances, it should be interesting to identify whether 'positive accounting' hypotheses would apply in such an environment. Therefore, this paper examines the relevance to financial reporting in Egypt of some established positive accounting theory hypotheses in addition to a new hypothesis related to taxation. The evidence of the study is consistent with the validity of the conventional 'bonus' and 'debt' hypotheses and the new 'taxation' hypothesis. These conclusions are also consistent with recent empirical studies of cultural and socio-economic change in Egypt.

This paper considers an aspect of possible managerial short‐termism in the UK. It discusses some potential motivations for that phenomenon and presents evidence which suggests that short‐termism exists and is positively associated with managerial perceptions of capital market valuation practices. Two hypotheses were developed and tested using the responses concerning R&D expenditure obtained from a postal questionnaire sent to the finance directors of theTimes 1000companies. These were that many top managers in UK quoted companies behave in a ‘short‐termist’ manner; and that the extent to which managers behave as hypothesized above is positively associated with their perceptions of the level of emphasis placed by the capital market on measurements related to short‐term reported earnings. The results obtained support the hypotheses. Overall, the evidence of the paper is consistent with the view that many finance directors of large UK companies are short‐termist in their perceptions and that such short‐termism is positively associated with their beliefs about the level of emphasis placed by the capital market on figures of reported earnings.

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This paper presents a new 'matching' based approach to depreciation that incorporates interest adjustments and generates accounting measurements that are consistent with the expost Net Terminal Values of fixed assets. The method has been developed from the concept of Earned Economic Income by the application of concepts drawn from the existing literature. The calculations and ledger entries involved are illustrated in the appendices.