This study explores possible effects of municipal accounting practices on asset-acquisition decisions. Theoretical decision models are developed using expenditure and depreciation accounting for reporting performance. The models suggest that expenditure accounting may lead to uneconomical leasing. Case studies of three cities focused on comparing present values of their leases to purchase alternatives and on interviewing department administrators. Significant uneconomical leases were found. The case studies suggest that a complete model of municipal administrators' acquisition decisions include consideration of accounting methods used to report performance; perceived risk of obsolescence; restrictions of grantors, third-party reimbursers and higher management; and administrators' background and training. © 1985.
Sharp, F. C. (1985). The effects of governmental accounting methods on asset-acquisition decisions: A theoretical model and three case studies. Journal of Accounting and Public Policy, 4(4), 251–276. https://doi.org/10.1016/0278-4254(85)90002-X