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An Axiomatic Theory of Accounting Measurement - Part II
journal contribution
posted on 2023-05-18, 10:13 authored by Willett, RJWillett (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 ResearchVolume
19Issue
73Pagination
79-91ISSN
0001-4788Department/School
TSBEPublisher
RoutledgePlace of publication
United KingdomRights statement
Copyright Routledge 1988Repository Status
- Restricted