Measuring and Valuation of Asset: Accounting Theory Perspective

Nurmadi, Ruswan; Adiman, Sumardi; Muda, Iskandar; Ginting, Sentosa

doi:10.5220/0009510912081212

Cited by 1 publication

(1 citation statement)

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“…Positive accounting theory develops along with the need to explain and predict the reality of accounting practices in society. Positive accounting theory seeks to explain observed accounting phenomena based on the reasons that cause an event to occur (Nurmadi et al, 2018). In other words, Positive Accounting Theory (PAT) is intended to explain and predict the consequences that occur if managers make certain choices.…”

Section: Positive Accounting Theory (Pat)mentioning

confidence: 99%

Approaches and critiques of Positive Accounting Theory (PAT) and Normative Accounting Theory (NAT) : a literature review

Utari,

Manalu,

Lubis

et al. 2023

Braz. J. Develop.

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Positive Accounting Theory (PAT) is an accounting theory that aims to explain and predict accounting practices carried out by companies. This theory emerged as an alternative to the normative approach which emphasizes more on what accountants should do in presenting financial information. However, PAT also received criticism related to the assumptions used in this theory. Therefore, this paper aims to review how the approach and criticism of PAT. The method used in this research is Systematic Literature Review (SLR) which is conducted by identifying, assessing, and interpreting all available research evidence regarding approaches and criticisms of PAT. The sources used in this paper are articles, books, and journals related to Positive Accounting Theory (PAT) and the criticisms raised against it. The results show that PAT has developed into a science that can be used to explain the choice of methods to be used by managers and other constituents of financial statements that can be used for decision making. However, PAT has also been criticized including issues related to research methods, methodology, and the basic assumptions underlying the theory. In conclusion, Positive Accounting Theory (PAT) has had a significant impact on accounting practice, but keep in mind that this theory also has limitations and has been criticized by some parties. This paper provides an in-depth insight into the approaches and criticisms of Positive Accounting Theory (PAT), as well as highlighting the importance of critical evaluation of accounting theory in the development of accounting science as a whole.

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Section: Positive Accounting Theory (Pat)mentioning

confidence: 99%