The article discusses the implications of measurement theory on accounting concept formulation. Measurement is a term of common usage in contemporary accounting literature. However, inclusion of the word in accounting terminology appears to have preceded any thoroughgoing analysis of measurement's essential meaning and corresponding implications to the discipline. The purpose of this article is to analyze some deficiencies in accounting thought inferred by the perception of accounting as an explanatory discipline that utilizes measurement as its primary mode of description. As a corollary objective, these problems will be related to some objectives for future accounting research. Correspondent with this objective is the responsibility of accountants, in both research and practice, for the explanatory significance of the numbers and statements issuing from accounting procedures. Accounting research literature is replete with alternative formulations of specific accounting concepts or percepts. On the other hand, analytical research at the metatheoretical level of definitional problems in accounting is virtually non-existent.

Considerable attention has been given in accounting literature to the development and refinement of alternative procedures of measurement and calculation, However, the problem of establishing the descriptive validity of accounting measurements and calculations has only recently received direct attention. The necessity of verifying the descriptive validity of accounting calculations issues directly from the accounting objective of providing descriptions or explanations of economic activity that are relevant to the purposive actions and adaptive behavior of data users. There is a tendency in contemporary accounting thought to argue or assume that the propriety of accounting calculations is sufficiently established (1) by the employment of ratio measurement scales and/or (2) by the ability of the number system governing measurement to satisfy the mathematical requirements of a field. We submit that neither of these two factors establishes the descriptive validity of accounting calculations. Further, we conclude that verification of descriptive validity necessarily requires empirical operations in the form of independent measurements that prove the additive nature of the property being measured.

The article criticizes a work of R. J. Chambers that provides an outstanding and provocative contribution to the development of accounting theory. The criticism involves a brief review of the relevant parts of Chambers' system, a technical discussion of the requirement of additivity in measurement, a discussion of whether Chambers' chosen property fits this technical requirement, and a more general discussion of the implications of the criticism. The authors conclude, for two reasons, that current cash equivalent is a nonadditive property. First, it is nonadditive because summation of the realizable prices of individual assets presumes independent sales of those assets and therefore does not involve a mode of combination. Second, it allows the independent sale of assets as a mode of combination and proceeds to question its possible artificiality

Presents a reply to Vickrey's comment on the study on the additivity of current cash equivalent. Rejection of the possibility that CCE could be defined as numerosity; Argument that purchasing power is nonadditive; Recommendations for future research.

Reviews the book "Pooling and Purchase Accounting: The Effect of Alternative Practices on Financial Statements," by Dean S. Eiteman.