Individuating Assets and Liabilities in Financial Accounting

Brian A. Rutherford

Abacus, 2022, vol. 58, issue 2, 233-261

Abstract: Until recently, accounting theorists gave little thought to what makes a particular instance of an asset or liability a single object and the very object it is—what individuates assets and liabilities. This paper offers an analysis of this individuation in the IASB's Conceptual Framework. It can be read at two levels: as an exploration of the coherence of the framework in its own terms, or, at a deeper level, as a philosophical analysis, located within philosophical pragmatism. I argue that the IASB framework's individuation is radically incoherent. I set out the case for a pragmatist approach and offer pragmatist principles of individuation. Standard setters have recently given some attention to individuation via a new kind of accounting object, the unit of account, and this is taken further in the IASB framework. This thinking is a good deal more convincing than the attempt to individuate assets and liabilities and is consistent with pragmatist principles. I propose reconceptualizing assets and liabilities using the principles developed for the unit of account. The paper extends our understanding of the way assets and liabilities are conceptualized in financial accounting; my proposal would improve the coherence of the conceptual framework in its own terms, provide a philosophically sound underpinning for its individuations, and open up the possibility of reconnecting the framework to the pragmatist epistemology encountered in classical accounting theory, extending the underpinning to the framework as a whole and, perhaps, reviving scholarly interest in the accounting theory of the framework project.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/abac.12244

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:abacus:v:58:y:2022:i:2:p:233-261

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0001-3072

Access Statistics for this article

Abacus is currently edited by G.W. Dean and S. Jones

More articles in Abacus from Accounting Foundation, University of Sydney
Bibliographic data for series maintained by Wiley Content Delivery ().