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An Axiomatic Theory of Accounting Measurement - Part II

journal contribution
posted on 2023-05-18, 10:13 authored by Willett, RJ
Willett (1987) described a transactions based theory of funds accounting. This paper extends the theory to explain asset and profit measurement. Eight axioms are listed which, when interpreted in the context of cost structures, are sufficient to justify the logic underlying the generation of accounting numbers in financial statements. Although the theory is expressed using deterministic concepts, one of its implications is that many derived accounting measurements used in practice (e.g. income calculations) are of an inherently probabilistic nature. The theory identifies the main stochastic variable which determine the statistical characteristics of such accounting numbers.

History

Publication title

Accounting and Business Research

Volume

19

Issue

73

Pagination

79-91

ISSN

0001-4788

Department/School

TSBE

Publisher

Routledge

Place of publication

United Kingdom

Rights statement

Copyright Routledge 1988

Repository Status

  • Restricted

Socio-economic Objectives

Service industries standards and calibrations

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