Superior Oil Company owned 1.4% of Texaco, Inc. which was carried at a cost of $64 million, despite its market value of $118 million. A major brewery using LIFO inventory valuation revealed that the average cost method would increase inventory value by $33 million [Kiesco and Weygandt,1982]. High interest rates and a drop in oil prices caused Texaco, Inc. to reduce its LIFO-valued inventories by 16%, netting $454 million. A loss year was thereby turned into a profit year. General Motors doubled its net earnings in 1981 by changing its "assumed rate of return" on its pension plan from 6% to 7% [Bernstein,1982]. With its many old and historical-cost undervalued plants and buildings, Ford Motor Company showed historical cost earnings of $9.75 per share in 1979, despite a current cost income of $1.78 [Greene,1980].
Patents may represent unrecorded assets insofar as their true earning value far exceeds their costs. Goodwill is another asset with a true value which is hard to assess.
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