The Accounting Review Vol. 12 No. 4 1937
ACCOUNTING POSTULATES: AN ANALYSIS OF THE TENTATIVE STATEMENT OF ACCOUNTING PRINCIPLES.
Abstract
This article presents an analysis of the tentative statement of accounting principles. Most objects are subject to different evaluations. Thus one man may view war as a glorious opportunity for the expression of the noblest sentiments of man. Another may regard war as a creation of the devil wherein mankind reverts to barbarism. But for both men the historical facts regarding war, when they are all discovered and presented, are the same. Differences appear in evaluation, so too with accounting. In formulating fundamental postulates to govern accounting procedure, therefore, one must be guided by the purposes which the accounting procedure is designed to serve. In the past the viewpoint and evaluation of the owner have been accepted as dictating basic principles. Accounting has been conceived almost entirely in terms of historical cost and historical transactions. In the usual case assets purchased may be justly conceived as costs applicable to the revenue which they are to assist in earning during the remainder of theft lives. The accountant frequently encounters difficulty, however, in allocating that cost to the respective and more or less arbitrary fiscal periods which the life of any given physical asset encompasses.
- DOI
- 10.2308/tar-7083628
- Volume
- 12
- Issue
- 4
- Pages
- 386-406
- Language
- en
- Sources
- openalex crossref