50 years of accounting thought: the revolutionary antecedents of fair value accounting

Graeme W. Dean, Martin E. Persson and Murray C. Wells

Accounting History Review, 2025, vol. 35, issue 3, 233-257

Abstract: This study revisits the question posed by Murray Wells in 1976 of whether accounting has undergone a Kuhnian revolution. Drawing on Thomas Kuhn’s model of scientific change, we argue that a paradigmatic shift has taken place in accounting thought and practice over the past 50 years. We trace the gradual displacement of historical cost accounting by fair value measurement, along with the rise of decision usefulness as the primary objective of financial reporting. This transformation, while largely uncontroversial in public discourse, has redefined both the conceptual foundations and practical mechanics of financial accounting. Through a historical analysis of US GAAP and related regulatory developments, we identify five distinct phases of change: pre-paradigmatic plurality, emergence of a dominant paradigm, crisis, revolution, and a return to normal science. We demonstrate how estimation techniques, market-based valuation, and the increased use of present values have transformed the logic and presentation of financial statements. The result is a quiet revolution in accounting that has unfolded incrementally but with profound consequences. We conclude with a reflection on recent developments in financial reporting that may represent the continuation or possible extension of this ongoing transformation.

Date: 2025
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DOI: 10.1080/21552851.2025.2532476

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