Resource information
Conventional national accounting practice emphasises depreciation as both a physical loss inproductive capital and an economic loss due to obsolescence. This emphasis is only partiallyparalleled in prescriptions for natural resource accounting, where resource depletion is typicallytreated as “physical capital depreciation”. Depreciation resulting from obsolescence—and thusrelative price changes rather than physical wastage—does not feature in resource accounting.The question is, what (if anything) does a consideration of obsolescence imply for work inresource accounting? What price changes should be incorporated into revised accounts, and whenare they distinct from capital gains/losses? What is the connection between obsolescence andproductivity change? What “counterfactual” should apply for renewable resources? This papercontains some tentative explorations of these questions.
