Accrual-based compensation, depreciation and investment decisions
研究了在短期合同中，当代理人从事具有长期和短期后果的活动时，应计项目相对于现金流在绩效衡量中的有用性，并刻画了一种最优折旧方法，该方法与传统折旧方法不同，能更好地匹配投资长期后果并降低代理人风险。
The paper studies the usefulness of accruals relative to cash flows for performance measurement in short-term contracts, if an agent undertakes activities with long-term and short-term consequences. It characterizes an optimal depreciation method for incentive purposes, and shows that it is not consistent with traditional depreciation methods. Rather, it aligns the performance measure with the expected long-term consequences of the investment, and shifts away compensation risk from the agent. The paper also identifies conditions under which accruals outperform cash flows as a performance measure even if the agent can manipulate the depreciation method.