Theory of measurement and its inference to accounting

Teorie měření a její konsekvence v účetnictví

David Procházka

Acta Oeconomica Pragensia, 2006, vol. 2006, issue 1, 193-209

Abstract: The first part of the exposition is aimed to establish basic definitions of the theory of measurement. I consider the possibilities and limitations of measurement in natural sciences, too. The findings of this part are extended to social sciences and the emphasis is put on measurement in accounting. Measurement of assets and liabilities and income determination are the fundamental parts of the measurement process in accounting. Proper measurement of these magnitudes is necessary in order to disclose useful and relevant information, especially about financial position, performance and changes in financial position of the firm. When preparing financial statements, we should respect both the substance of the economic activities carried out by firms and also the correctness of mathematical operations performed in accounting. On this account, the introduction of current values as primary valuation basis is the crucial condition. Current costs or current realizable price (opportunity costs) are possible alternatives. I recommend presenting both type of information (as components of the multifunctional statements) in order to enhance the quality and usefulness of disclosed data.

Keywords: theory of measurement; measurement in accounting; current values; fair-value; realizable profit; business profit (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2006
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://aop.vse.cz/doi/10.18267/j.aop.531.html (text/html)
http://aop.vse.cz/doi/10.18267/j.aop.531.pdf (application/pdf)
free of charge

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:prg:jnlaop:v:2006:y:2006:i:1:id:531:p:193-209

Ordering information: This journal article can be ordered from
Redakce Acta Oeconomica Pragensia, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3
http://aop.vse.cz

DOI: 10.18267/j.aop.531

Access Statistics for this article

Acta Oeconomica Pragensia is currently edited by Klára Šimůnková

More articles in Acta Oeconomica Pragensia from Prague University of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Stanislav Vojir ().