The paper analyses the possibility of using the economic concept of income introduced by J. R. Hicks for accounting … the area of managerial accounting and capital maintenance. Some aspects of Hicks’ income concepts can be even found in …

intentional income smoothing than with the integral approach to accounting. Our evidence is consistent with income smoothing being …-year earnings. We do this by examining income smoothing based on pseudo fiscal years. For each firm, we create pseudo-year earnings …-year earnings. We find that this measure of income smoothing behaves as expected in a variety of cross-sectional tests. Moreover, we …