Accounting standards: the ‘too difficult’ box – the next big accounting issue?

Mary E. Barth

Accounting and Business Research, 2022, vol. 52, issue 5, 565-577

Abstract: Embracing the perspective of accounting as providing information to support capital allocation decisions could help avoid accounting issues ending up in the ‘Too Difficult' Box. Investors need and use information not contained in traditional financial statements. Thus, focusing on financial statements as the sole accounting output limits the ability of accounting reports to meet investors' information needs. Two issues on the horizon—accounting for digital assets and the effects of climate change—reveal how embracing this perspective could help avoid the ‘Too Difficult' Box. These issues reveal pitfalls arising from trying to fit newly created assets into categories—and consequent accounting—designed for previously identified assets. The issues also reveal potential benefits of substituting non-financial information for unavailable financial information rather than omitting the items from accounting reports. Both issues reinforce investors' need for information about risk. Digital assets, climate change, risk, and—more broadly—whether and how accounting reports should be broadened beyond financial statements motivate many interesting research questions. Insights from this research are vital as accounting faces potentially revolutionary changes in investors’ information needs.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00014788.2022.2079757 (text/html)
Access to full text is restricted to subscribers.

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:taf:acctbr:v:52:y:2022:i:5:p:565-577

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RABR20

DOI: 10.1080/00014788.2022.2079757

Access Statistics for this article

Accounting and Business Research is currently edited by Vivien Beattie

More articles in Accounting and Business Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().