Current Developments in Accounting Thought

Running Head: CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT
CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT
Name of the Student
Name of the University
Author Note

1CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
Table of Contents
Answer 1....................................................................................................................................3
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Advancement of Conceptual Framework Projects Advantages.............................................3
Comparison and Contrast of the Government Intervention and Conceptual Framework
Advantages.............................................................................................................................5
Conclusion..................................................................................................................................6
Answer 2....................................................................................................................................7
Introduction................................................................................................................................7
Discussion..................................................................................................................................7
Relevancy of the Fair Value or Historical Cost to the Users.................................................7
Conclusion..................................................................................................................................8
Answer 3....................................................................................................................................9
Introduction................................................................................................................................9
Discussion..................................................................................................................................9
Historical Accounting Methods Merits..................................................................................9
Methods Proposed by Other Authors...................................................................................10
Conclusion................................................................................................................................12
Reference..................................................................................................................................13

2CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
Answer 1
Introduction
Historical cost accounting is the one of the widely used method of the value used in
the system of accounting, under which price of asset on the balance-sheet of the financial
statements is based on the actual or original price. Hence, under this assignment, discussion
will be done on the development of the conceptual frameworks projects as well as legitimacy
to the standard-setters during threatened government intervention.
Discussion
1 a)
Advancement of Conceptual Framework Projects Advantages
The conceptual framework is the statement of theoretical principles that helps in
providing the guidance for accounting and the financial reporting. It is the body of
fundamental approaches and financial reporting. Moreover, the conceptual framework is
having the main objective for identifying the financial reporting goals. The fundamentals of
the conceptual framework are the underlying concept that helps in achieving the desired
objective of financial reporting (Macve, 2015). It provides the guidance to select the
transactions, accounting of events as circumstances, recognition and measurement as well as
way of summarization and reporting. The purpose of the financial reporting is to provide the
information, which is useful and that is the basis for making the economical decisions. The
conceptual framework generally takes the form of the theoretical basis in order to determine
reporting as well as measurement of transactions, which provides the way of it is
communicated as well presented to the users (Beattie, 2014).
The advancement of the project of the conceptual framework has some of the major
advantages. The conceptual frameworks aims for clarifying the conceptual underpinnings of

3CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
standards of accounting as it helps in allowing the setters of standards to develop the
accounting standards on the consistently basis. It helps the users, auditors or the preparers to
assists in order to understand the approaches of the function of setting of standard as well as
reporting nature of the financial information. Moreover, the conceptual framework helps in
dealing with the fundamental issues of the financial reporting, which may includes
recognition concept, measurement of the financial reporting elements and users of financial
reporting and so on (Ellwood & Newberry, 2016). It has the feature, which makes the
accounting information as well as elements of the financial statements such assets, liabilities,
revenue and expenses useful. The conceptual framework helps in contributing significantly to
the confidence of the public and financial reporting credibility with consistency, reliability as
well as relevance with the help of employing the uniform and clear defined principles.
Further, the conceptual framework beneficiary is FASB. The conceptual framework provides
the FASB with the foundation of setting the concepts as well as standards to use as a tool in
order to reduce and resolve any questions related to reporting and accounting (Bachmann,
Gillespie & Priem, 2015). The benefits are generally availed by both, users as well as
preparers of the financial statements that are based on accounting body requirements and are
consistent internally. The financial statements users gets the benefit from the development of
the conceptual framework, it is because the users get information on the concepts of profits,
clarifications of gains, organization’s position of liquidity as well as assets measurement.
Moreover, if the conceptual framework is absent in the company then the setters of standard
are acceded to the pressure of the external interested groups, which leads towards haphazard
a well as ambiguous guidelines (Zhang & Andrew, 2014).
1 b)