Depreciation and Enterprise Valuation

Depreciation and the Market's Valuation of Earnings

The purpose of this paper is to better understand how financial markets use depreciation information that appears in the financial statements . When computing depreciation expense, a firm has discretion in its choice of depreciation method and this choice can impact the amount of depreciation expense and therefore reported earnings. Ceteris paribus, we claim that a firm which reports a low depr...

Methods of Estimating Depreciation in Valuation of Public Utilities for Rate Making Purposes

Selling or Leasing? Pricing Information Goods with Depreciation of Consumer Valuation

Should a monopolistic vendor adopt the selling model or the leasing model for information goods or services? We study this question in the context of consumer valuation depreciation. Using a two-period game-theoretic model, we consider two types of consumer-side valuation depreciation for information goods or services: vintage depreciation and individual depreciation. Vintage depreciation assum...

Geography, Depreciation, and Growth

Any visit to the seashore will confirm that it is more difficult to build a large sandcastle if one locates the project too near the lapping waves of the ocean. The sandcastle may grow well initially, but eventually a rouge wave washes out some portion of the progress. It may be possible for the sandcastle to grow on net, so long as investment in building outpaces losses to the waves, but it mu...

Service Elements Valuation Using an Enterprise Architecture Language

This article defines a service as an architecture of processes, software and infrastructure elements for serving people. An architecture language therefore is a means to structure and analyze the values of service elements and the service as a whole. We provide a value-based perspective, which first includes a review of the concept of value in the context of service architectures for services. ...