A Statistical Activity Cost Analysis of the Relationship Between Physical and Financial Aspects of Fixed Assets

Colin, Andrew; Falta, Michael; Su, Steve; Turner, Lyle; Willett, Roger; Wolff, Rodney C.

doi:10.1007/978-1-84628-814-2_43

Cited by 1 publication

(2 citation statements)

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“…The implications for risk assessment based upon publicly available financial reports are obvious, since users would be able to compare the extent of variability in accounting values and thus varying levels of 'risk' between different firms. In a management accounting context this kind of comparison is currently being made, at a finer level of detail and with access to information from plant maintenance systems, between different asset management policies, using a statistical activity cost analysis (Colin et al, 2006). In auditing, the estimation of distributions of accounting numbers offers the prospect of using analytic review procedures in additional substantive testing areas.…”

Section: Discussionmentioning

confidence: 99%

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The impact of depreciation-type adjustments on the distribution of accounting earnings

Hillier

Willett

2006

Accounting and Business Research

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In this paper, experimental, computer simulation methods are used to demonstrate how a depreciationtype adjustment influences the distributional form of accounting earnings. The results confirm conjectures that earnings distributions generally. with or without depreciation adjustments. tend towards a normal form as a function of increasing 'activity' levels. They also indicate that depreciation is likely to accelerate the transition towards a normal form as activity levels increase and to transform a non-normal form to one that is significantly closer to the normal at relatively low activity levels. The impact of the fixed asset 'impairment' rules is also investigated. The results reported in the paper have implications for standard-setting, risk analysis and inference using accounting earnings and related numbers, including ratios based upon earnings.

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Section: Discussionmentioning

confidence: 99%

“…Most recently the theory has been applied to modelling asset maintenance costs in Royal Australian Navy vessels (e.g. see Colin et al, 2006).…”

Section: Introductionmentioning

confidence: 99%

The impact of depreciation-type adjustments on the distribution of accounting earnings

Hillier

Willett

2006

Accounting and Business Research

View full text Add to dashboard Cite

show abstract

A Statistical Activity Cost Analysis of the Relationship Between Physical and Financial Aspects of Fixed Assets

Cited by 1 publication

References 17 publications

The impact of depreciation-type adjustments on the distribution of accounting earnings

The impact of depreciation-type adjustments on the distribution of accounting earnings

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