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Lookup NU author(s): Susan Brackenborough,
Professor David McCollum-Oldroyd
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The paper examines the origins of discounted cash flow analysis (DCF) in the Tyneside coal industry and explains its sudden adoption around 1801. It finds that a complex series of circumstances were involved, but that in terms of the catalysts, the prime motivation was economic. DCF was a specific wealth-maximization response to the economic conditions of the day. Second, there is the question of the utility of accounting in the British Industrial Revolution which has been variously denigrated or rehabilitated by researchers. The adoption of DCF is a clear case of accounting and engineering technologies combining to facilitate the exploitation of deep coal reserves, where accounting acted as a determinant of industrial expansion. Finally, the paper finds that the DCF valuation method of the early viewers (mining engineers/managers) was still being applied in the British coal industry in the modern era, suggesting that for one major industry at least, the absorption of DCF within the domain of modern accounting practice was primarily a question of tradition and not just an educational innovation of the 1960s. © 2001 Academic Press.
Author(s): Brackenborough S, Mclean T, Oldroyd D
Publication type: Article
Publication status: Published
Journal: British Accounting Review
ISSN (print): 0890-8389
ISSN (electronic): 1095-8347
Publisher: Academic Press
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