Amortization of non-produced assets

Issue Should cost of acquiring non-produced asset be deduction from gross value added for user of the asset? If so, where does corresponding increase in value of asset to be ultimately returned to owner show up?

Mobile phone considerations Want cfc in production account of licence holder Would need compensating adjustment for spectrum owner - not clear where to put it Settle for both recorded in other change in assets account

Proposals Dipplesman and Mahle - record as new form of property income Correct values for saving but no impact on production account

Binns et al (1) Transfer ownership of spectrum to user; treat up - front payment as pre-paid interest Still does not address production account problem

Binns et al (2) Treat decrease in value for licence holder as form of cfc in production account but corresponding increase for spectrum holder in other changes in volume of assets account Problem of asymmetries

Canberra conclusion Do not change

But… Two asset solution would give a means of recording a decease in the value of the asset of the licence holder balanced by increase in net worth of spectrum owner via accrued interest