Price variation accounting, Price-level adjusted accountings, Net income, Time value of money

It is beyond dispute that financial statements have reference, in some sense, to the financial outcomes of past actions: to the net change in the residual equity and to the change in the composition of assets and equities. They relate only to financial consequences and characteristics. They say nothing about purely technical or purely mercantile outcomes of possibilities or positions. They do not indicate the age, the technical capacity, the spatial distribution or any similar characteristic of assets; they say nothing about the numbers and types of customers, suppliers, or workers of firms. For information on all such matters as these, business managers turn to other sources. The capacity of accounting to represent the aggregative consequences of actions taken, in terms of the current monetary unit and the value of aggregative statements of results and positions from time to time as indicators of possibilities and constraints (for the present command of resources constitutes the constraints of future actions), are the reasons for the widespread use of financial statements and the sources of the usefulness of accounting.

This article focuses on the prospective adventures in Accounting ideas. Almost the whole of the development of accounting ideas as they are today relevant has occurred within the lifetime of the Association and in that development members of the Association have played a prominent and honored part. Without belittling the record or the massive endeavors of many, one cannot here name, we can usefully look at a few ideas, a few cases in which men have thought greatly of accounting. These fifty years have seen quite a few potentially fruitful ideas, with wide implications, brought to notice, noticed scarcely at all and almost abandoned. This was an adventurous exercise, novel in the literature. At the same time he roundly criticized some of them. This too was rather bold. But though the intervening years have provided outstanding illustrations of the inadequacy of these assumptions, substantially the same assumptions underlie today's accounting. According to the author, accounting could become a real language of business finance instead of a mass of only vaguely understood and only vaguely understandable symbols.