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Abstract
Conventional national accounting practice emphasises depreciation as both a physical loss in
productive capital and an economic loss due to obsolescence. This emphasis is only partially
paralleled in prescriptions for natural resource accounting, where resource depletion is typically
treated as “physical capital depreciation”. Depreciation resulting from obsolescence—and thus
relative 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 in
resource accounting? What price changes should be incorporated into revised accounts, and when
are they distinct from capital gains/losses? What is the connection between obsolescence and
productivity change? What “counterfactual” should apply for renewable resources? This paper
contains some tentative explorations of these questions.