Transcript m4Amortization

Amortization of non-produced
assets
Issue
• Should cost of acquiring non-produced
asset be deduction from gross value
added for user of the asset?
• If so, where does corresponding
increase in value of asset to be
ultimately returned to owner show up?
Mobile phone considerations
• Want cfc in production account of
licence holder
• Would need compensating adjustment
for spectrum owner - not clear where to
put it
• Settle for both recorded in other change
in assets account
Proposals
• Dipplesman and Mahle - record as new
form of property income
• Correct values for saving but no impact
on production account
Binns et al (1)
• Transfer ownership of spectrum to user;
treat up - front payment as pre-paid
interest
• Still does not address production
account problem
Binns et al (2)
• Treat decrease in value for licence
holder as form of cfc in production
account but corresponding increase for
spectrum holder in other changes in
volume of assets account
• Problem of asymmetries
Canberra conclusion
• Do not change
But…
• Two asset solution would give a means
of recording a decease in the value of
the asset of the licence holder balanced
by increase in net worth of spectrum
owner via accrued interest