BUSINESS FLUCTUATIONS AND FINANCIAL ACCOUNTING MEASUREMENT: HISTORICAL COMMENTS

Stanley C. W. Salvary ()

Macroeconomics from EconWPA

Abstract: This paper addresses a theme in an historical setting that financial accounting measurement contributes to: (1) retardation of national economic growth by the failure of financial accounting to provide for the replacement of capital goods in its measurement process; and (2) the business cycle owing to the illusory profits reported in financial statements. The author explores the issues and concludes that the arguments against accounting are based upon misunderstandings.

Keywords: retardation of economic growth; national or social accounting; replacement cost accounting; Harrod's 'instability principle'; maintenance of physical capacity; illusory profits. (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-his and nep-mac
Date: 2005-02-01
Note: Type of Document - doc; pages: 22
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0502006

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