An Axiomatic Theory of Accounting Measurement—Part II

Willett, Roger

doi:10.1080/00014788.1988.9728838

Cited by 37 publications

(34 citation statements)

References 3 publications

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“…Measurement theory describes the property to be measured as the qualitative, empirical property, and certain conditions govern its selection. Accounting theorists who have supported the application of measurement theory to accounting include Mattessich (1964a), Chambers (1965), Sterling (1970), Vickrey (1970), Willett (1987Willett ( , 1988 and Salvary (1989). Stevens' (1946, p.680) statement that the application of "a consistent set of rules" for a stated purpose constitutes measurement appears broad enough to include accounting.…”

Section: Converting the Calculus Into A Theorymentioning

confidence: 99%

“…Fisher's (1906) concept of property rights is adopted as the underlying qualitative, empirical property of the accounting elements, the objects of measurement. Second, transactions are accepted as the fundamental measurements (Canning, 1929a(Canning, , 1929bFisher, 1930;Littleton, 1933;Mattessich, 1964a;Ijiri, 1967;Willett, 1987Willett, , 1988. Derived from executed contracts, transactions are the primary means by which changes in property rights are measured, the contract consideration stipulating the amount of the relevant transaction.…”

Section: Monetary Profit Measurementmentioning

confidence: 99%

“…10 Salvary (1985,1992) selected recoverable cost as his qualitative, empirical property, but as recoverable cost is restricted to assets it does not include all the accounting elements. Willett (1987Willett ( , 1988 selected cost as the qualitative, empirical property underlying the cost structure of his statistical activity cost theory (SACT). Willet (1988, p.87) noted that his resource set, defined in terms of cost, could be extended by being defined in terms of rights.…”

Section: Appendix Amentioning

confidence: 99%

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Financial accounting reform: the need for a 'back to basics' approach for profit measurement and wealth measurement

Ryan

2014

IJEA

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By recognising the dual purposes of financial accounting, and developing distinct theories to guide the preparation of financial reports, the apparent internal contradictions in accounting theory can be resolved. Property rights and measurement theory provide the basis for explaining transaction-based profit measurement and funds commitment, and for a statement of wealth measured using market prices. Property rights are recognised in The New Institutional Economics. Going beyond accepted accounting conventions, property rights provide the qualitative, empirical property giving meaning to accounting practice for profit measurement through the 1940s to 1960s. Examples of profit and of wealth measurement are included. Abstract: By recognising the dual purposes of financial accounting, and developing distinct theories to guide the preparation of financial reports, the apparent internal contradictions in accounting theory can be resolved. Property rights and measurement theory provide the basis for explaining transaction-based profit measurement and funds commitment, and for a statement of wealth measured using market prices. Property rights are recognised in The New Institutional Economics. Going beyond accepted accounting conventions, property rights provide the qualitative, empirical property giving meaning to accounting practice for profit measurement through the 1940s to 1960s. Examples of profit and of wealth measurement are included.

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Section: Converting the Calculus Into A Theorymentioning

confidence: 99%

Section: Monetary Profit Measurementmentioning

confidence: 99%

Section: Appendix Amentioning

confidence: 99%

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Financial accounting reform: the need for a 'back to basics' approach for profit measurement and wealth measurement

Ryan

2014

IJEA

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“…A genuine or "true" surplus can only arise with an increase in the net amount of the money consideration of relevant transactions changing property rights of the entity. Transactions provide the fundamental measurements underpinning the general system for external financial reporting (Littleton, 1933;Paton and Littleton, 1940;Ijiri, 1967;Willett, 1987Willett, , 1988Salvary, 1992;Gibbins and Willett, 1997).…”

Section: Introductionmentioning

confidence: 99%

The Relationship Between Accounting Profit and Economic Income

Ryan¹

2007

Australian Accounting Review

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The reliance on economic concepts, most notably economic income, for the measurement of profit in financial accounting is misplaced. This paper explores the concept of economic income, contrasting it with the concept of profit in the conventional accounting model. The concept of individual economic income cannot be used for measurement of profit for a past period as the concept is based on the capitalisation of expectations and excludes "separate but correlated" concepts of profit and capital needed for capital maintenance. The relationship between accounting profit and economic income AbstractThe ascendancy of economic concepts, most notably economic income, and reliance on them for the measurement of profit in financial accounting is misplaced. Schipper and Vincent (2003) and Justice Owen of the HIH Royal Commission provide recent examples of the dominance of economic ideas. This paper explores the concept of economic income, contrasting it with the concept of profit of the conventional accounting model.As Kaldor (1955) has shown, the Hicksian concept of individual economic income cannot be used for measurement of profit for a past period as the concept is based on the capitalisation of expectations, and excludes "separate but correlated" concepts of profit and capital, needed for capital maintenance. The Alexander/Solomons (1962) concept of variable income allowing for uncertainty is unable to escape the limitations of capitalised expectations. Attempts to develop support for a concept of current income from the economic model are also found wanting.Acceptance of these conclusions has implications for identifying relevant criteria in conceptual frameworks to guide the setting of accounting standards.

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“…In accounting, a rational framework which provides such an interpretation of costs is Statistical Activity Cost Analysis (SACA) due to Willett (1987Willett ( , 1988Willett ( , 1991 and extended by Gibbins & Willett (1997) and Falta & Wolff (2004). To date, applications of this framework to aspects of reliability theory, maintenance or life-cycle analysis have been limited (Falta, 2005).…”

Section: Introductionmentioning

confidence: 99%