Economic Income in an Accounting Context and its Development Process : Around the Argument until the 1980s

DOI HANDLE Web Site Open Access

Bibliographic Information

Other Title
  • 経済的利益概念の展開 : 1980年代までの議論を中心にして
  • ケイザイテキ リエキ ガイネン ノ テンカイ 1980ネンダイ マデ ノ ギロン オ チュウシン ニ シテ

Search this article

Abstract

In an earlier paper, I pointed out that Fisher, Lindahl, and Hicks contributed to the formation of the concept of economic income, and that Canning and Alexander contributed to its establishment. Moreover, although not generally asserted, I pointed out that two genealogies were born through the process of the development of the economic income concept. One is the Fisher-Canning genealogy characterized by economics－based monism ("colonization of accounting by economics"), and the other is the Hicks-Alexander genealogy characterized by economics and accounting-based dua1ism ("reconciliation between economic and accounting concept"). Essentially, the former is connected with the service-potentials concept (future economic benefits concept)and single evaluation by(discounted)present value. The latter is connected with the deprival value concept (value to the business concept) and multiple evaluations that focus on replacement cost. Further, there are some important differences. Which is premised; certainty or uncertainty, which is intended; stock-based income (single income) or stock and flow-based income (dual income), and whether self-generating goodwill is recognized on a balance sheet or not. This paper aims to review the two above genealogies and how they were developed after the formation and establishment of the concept of economic income, mainly focusing on the arguments from the 1960s to the 1980s. This paper is set out in the following way. First, that features of the Fisher-Canning genealogy have been taken over by AAA, Staubus, Sprouse=Moonitz, Revsine, etc. is clarified. Then that features of the Hicks-Alexander genealogy have been taken over by Wright, Barton, etc. is examined. Further, that both genealogies were combined (confused without distinguishing) by Solomons is analyzed. Although this paper focuses on arguments made up to the 1980s, the economic income concept has become more fully developed as present value accounting after the 1990s. Then in the 2000s it has been developed as part of fair value accounting. Over a considerable period the two genealogies were generated, established and developed separately, with each system gaming support and respect. If they are now to be put back together in a single vessel, while this might be user-friendly, there will be a loss of theoretical restrictions. That is, economic income and present value lose their status as "concepts" and become merely "tools". Present value will come down to being a measurement technique of fair value accounting, as recently argued. If the scope of present value techniques is needlessly expanded, we face serious risk that they will be misused, as seen recently.

Journal

  • 經濟學研究

    經濟學研究 73 (2/3), 117-132, 2006-11-28

    Society of Political Economy, Kyushu University

Keywords

Details 詳細情報について

Report a problem

Back to top