Law & Economics Working Papers
Depreciation is difficult and expensive to measure yet central to measuring capital income. This paper considers whether measurement resources should be allocated to longer-term assets on the theory that depreciation matters more for long-term than for short-term assets. This paper argues that accuracy in depreciation is equally or more important for short-term as for long-term assets. Nevertheless, measurement costs are likely to be higher for short-term assets than for long-term assets, which means we might expect less accuracy, all else equal, for short-term assets.
David A. Weisbach, "Measurement and Tax Depreciation Policy: The Case of Short-Term Assets" (John M. Olin Program in Law and Economics Working Paper No. 176, 2003).