| Abstract: | In their paper, “Determining Cost of Sales in the CCA System”, in the November, 1981 issue of Accounting and Finance, Messrs. Das and Fraser claimed to “have demonstrated that the recommended capital maintenance adjustment of the Australian Provisional Standard, as it relates to cost of sales, is inappropriate”. They went on to propose a “correct method”, “to redefine the capital maintenance concept employed”, and to point out that their new definition “seems to have both conceptual and practical difficulties”. The purpose of this brief paper is to demonstrate that Messrs. Das and Fraser overlooked one most important aspect of the Australian CCA model, and that the simple examples they employed in their paper perfectly maintained operating capacity “at the level which existed at the beginning of the period”. There was no need for them to devise any “alternative approach”. |
