Charles Sturt University ACC518: Current Accounting Thought Analysis

This essay, prepared for ACC518 at Charles Sturt University, delves into the current developments in accounting thought. It begins by defining the IASB Conceptual Framework and its objective of general-purpose financial reporting, discussing its advantages and beneficiaries. The essay then examines the proposal that conceptual frameworks are used to legitimize standard-setting bodies. Furthermore, it outlines the objectives of general-purpose financial reporting, identifies its main users, and discusses the implications of accounting measurement for those users, particularly concerning Fair Value Accounting (FVA) and Historical Cost Accounting (HCA). The essay also defines normative theory, HCA, and its alternatives, critically evaluating their relevance and providing insights into the ongoing debate about the most relevant accounting methods.

Running head: CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
Current development in accounting thought
Name of the student
Name of the university
Authors note

1CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
Table of Contents
Answer to question 1......................................................................................................3
Define the IASB Conceptual Framework, including its objective of general purpose
financial reporting..................................................................................................................3
Discuss the advantages that could result from the development of conceptual
frameworks, and outline the relevant beneficiaries................................................................3
Discuss the proposal that conceptual frameworks are used by the accounting
profession as 'a strategic manoeuvre for providing legitimacy to standard setting bodies'. . .4
Conclusion..................................................................................................................5
Answer to question 2......................................................................................................6
Outline the objectives of general purpose financial reporting...................................6
Identify the main users of general purpose financial reporting..................................6
Outline the implications for accounting measurement for the identified users of
general purpose financial reporting, particularly with regard to FVA and HCA...................7
Answer to question no 3.................................................................................................7
Define normative theory............................................................................................7
Define HCA and briefly discuss its underlying assumptions (characteristics,
strengths and weaknesses) and evaluate its relevance in times of rising prices.....................8
Describe the normative alternatives to HCA and discuss their underlying
assumptions (characteristics, strengths and weaknesses).......................................................8
Critically evaluate whether any of the normative alternatives to HCA provide
information which is of greater relevance to users of accounting.........................................9

2CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
Conclusion................................................................................................................10
References....................................................................................................................12

3CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
Answer to question 1
Define the IASB Conceptual Framework, including its objective of general purpose
financial reporting
The Australian accounting standard board is the pioneer of proposing and
implementing the accounting rule and regulations in the government as well as to every other
organisation. Hence the framework sets out the regulations for preparing and presenting the
financial statements to the users who externally influence the company who (Hoogervorst &
Prada, 2015, pp.1-12). Hence the basic motive highlighted in the framework can be stated as
follows.
 Coordinate the AASB for developing the Australian accounting standard of
future in reviewing of the accounting standard that is presently existing,
including the evaluation proposed by the international accounting standard
board pronouncements (IFRS 2019a). Hence in this case the overall
standardization of the financial report used for general purposes, is to be
maintained. Hence the IASB conceptual framework have improved the
objectives of the financial reporting for the general purposes .
Discuss the advantages that could result from the development of conceptual
frameworks, and outline the relevant beneficiaries
As per the rules and the regulations of the standard setting boards are to be concerned
along with the conjunction of the general accounting bodies. The same could advocate the
general conceptual framework and the same could look to imply on the overall company
outlook and it is expected that the same is very much user oriented. Hence here most of the
company objectives are fully based on the general purpose financial report. Thus there are a

4CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
number of advantages which could be properly implemented in the case of defining the
conceptual framework. These are as follows-
o The accounting standards which are been developed in the process and the
same had been developed by applying the overall process of the business
procedure and framework which is both legal and logical.
o Since many countries have identified and the developed conceptual framework
being similar, the international compatibility should be bigger between the
several countries accounting rules and regulations. Therefore the overall
consistency and the compatibility will be present inside the reports used for
financial purposes internationally. and hence the same includes the foreign
international and investment capital.
o The conceptual framework has provided the fundamental accounting system
and the policies to be following the rules as given by the standard settings and
wants them to be more accountable to the process. Thus it deviates from the
key issues to be addressed in a conceptual framework and there is a clear
recommendation to the process.
o The overall conceptual framework has the means of providing the key
communications concepts of the accounting framework. Hence the accounting
setters will be subjecting to the best possible standards which are all over
developed in the process of the new standards.
o On the other hand the major standard setters may eye on compensating the
new issues and with the increase to the accounting standards are to be made
useful to the fundamental rules and process.
Hence advantages resulting from the conceptual framework have developed the
relevant beneficiaries could outline the overall process.

5CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
Discuss the proposal that conceptual frameworks are used by the accounting profession
as 'a strategic manoeuvre for providing legitimacy to standard setting bodies'.
As per the rules and study followed by the overall analysis of the early development to the
financial reporting standard as per the AASB conceptual framework it is assumed to be
having a critical perspective and calls for motivation schedule for the movements of the
FASB rule. Hence the overall rules and regulations does call for acting over some self-
interest as per the process. Here the overall changes can ask for the normative ethical
movement and the same have been described as the ethical elitism or ethical parochialism.
However it is further to be said that by assessing the overall valuable process which in
general could drive the integrity and pull over the professional identity. On the other hand the
absence of the formal body language can be detrimental to the overall process. Here the
group of professionals could generally look to re-regulate and demonstrate the general
adapted standards and it is expected that the general standards could defence against the
outside interventions. The basic conceptual policies and the procedures could look to promote
the certain qualities towards the legitimacy. Hence such process includes the objectivity,
neutrality and the representable faithfulness over the actual process. On the other hand the
political nature of the standard setting and the other sublime judgemental areas in the process
and the same have made to achieve the faithful representation by judging the accounting
standards value as well as the faithful representation of the underlying standards and the
standard setting have made identified towards the events of the conceptual framework.
On the other hand hinds have interpreted as argument that the overall development to the
process of setting the conceptual framework rules and the regulations in the relation to the
process. Hence the conceptual framework is really considered to be an important aspect of
the accounting profession and the presentation mistake is presence of the purported to the
benefits to the financial statement users rule. Thus the conceptual framework has been very

6CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
much useful to describe the standard manoeuvre of the legitimacy and focus on the standard
setting bodies.
Conclusion
Hence the insights which have been drawn from the case can be considered that the
constraints perspectives and the overall evaluations which are been drawn to the insights as
per the revaluation technique. Hence the process had developed the conceptual framework for
the rules and regulations under the legitimisation.
Answer to question 2
Outline the objectives of general purpose financial reporting
The general objectives of the financial reporting used for general purposes is to reflect
the information relating to the
Financial position
Financial performance
Cash flows of an entity which is useful to a wide range of users making economic
decisions. Hence these users Are the economic and the potential investors who have the
capacity entity in order tom generate the overall cash and the equivalents of cash for paying
to the employers and the suppliers as a whole. Hence the users will be better in evaluating
their capabilities of generating the cash and equivalents of cash if a they are given a process
of making interest loan repayment and make distribution to the owners. The overall
objectives of the general purpose financial reporting could well improve the financial position
and the financial performance for the organisation.

7CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
Identify the main users of general purpose financial reporting
The main users of the financial reporting used for general purposes are the creditors
and the investors. Since the financial statements are one of the important document or report,
hence these reports show how the business status such as the labour unions, stakeholders and
the company board of directors help in growing the internal business aspects in term of
having the new investors of the tax value is paid to the government article and stakeholders.
Hence this is the reason why the financial statements arm very important to the creditors and
the investors to the business and taxes to surpass over the corporate world. Hence these users
are used to be very much effective for the general purpose financial reporting.
Outline the implications for accounting measurement for the identified users of general
purpose financial reporting, particularly with regard to FVA and HCA
As per the stewardship process of the financial standard of functional to the role play
for the financial reporting standard and the same had demonstrated that whether the general
resources have been provided to the management in the form of trust and the same is based
on the appropriate process. The purpose is commonly referred as then accountability focus
technique for the financial report based on the previous actions provided by the movement.
Thus the overall information’s to be utilised in the process in the case of decision making.
Another alternative area could be considered in this case is based on the financial reporting
process. It has become one of the most common and accepted goals analysis in recent times.
Hence to assist the whole process it is important to make sure that the decisions are of highly
economical. Hence then decisional usefulness have also made to achieve the overall part and
the parcel of the jobs. Hence the overall usefulness does depend on the future decisions
making aspects. It lay emphasis on the importance of the future making decisions as well as
the traditional stewardships to the process for keeping the financial reports. Hence the

8CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
accounting users belonging to the financial reporting of general purposes with respect to FVA
and HCA have been very much useful to this context.
Answer to question no 3
Define normative theory
It checks or hypnotise the other statements and tells that whether the theory applicable
for the society based on its truth, desire or justification. The majority of the sociologists have
considered to it to be irrelevant to shift from being explanatory to evaluative. The value free
objectives, drives and the value judgements to be considered here (Henderson 2014:pp: 967-
969).
Define HCA and briefly discuss its underlying assumptions (characteristics, strengths
and weaknesses) and evaluate its relevance in times of rising prices
The assets are fully recorded in the process of the amount of the e total cash and cash
equivalent paid. However the overall considerations are paid for the money at the time of
monitory acquisition. Hence the overall liability value had been recorded at the time of
obligations of exchange rate in the process. Hence by considering the overall circumstances
like the income tax and other rest of the valuations, the total amout of the cash and the cash
equivalent expects to pay in order to satisfy the overall liability in the overall course of
business. On the other hand the HCA assumes that the purchasing power of the overall
currency had been constant over time. Thus it is also assumed that bthe process of time
period. On the other hand the overall value is calculated in the process as per chambers.
Hence the overall value process is made in the value additions. On the other hand the
business rules and regulations play an overall importance in this regard. On the other hand the
business comments are in the need to be considered in this manner. Hence it is to be said that
the chambers are being continuously compounded in this regard as per the continuously

9CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
compounded interest. Here all the changes are valued as per the contemporary accounting
model and it plays an important role in maintaining the advocacy and deploying the support
to the normative measurement theory. Therefore it can be said via conclusion that the HCA
have played a proper role in the respect of generating the normative rules and regulations and
maintaining the overall assumptions to the process including the general strength and the
weakness related to the HCA. Hence it can be seen that the HCA process discusses the
overall assumptions which are useful in the context of the rising prices and the same could
evaluate the rising price. Apart from that the overall relevance is provided in the case of
HCA.
Describe the normative alternatives to HCA and discuss their underlying assumptions
(characteristics, strengths and weaknesses)
According to Chambers (1966, as cited in Deegan, 2014, pp.171,190), "... the prices
of the past have become elements of history. The current prices are influencing the choice of
action. This comment needs to be considered highlighting the fact that the Continuously
Contemporary Accounting Model has been authored by Chambers and so in a sense, he was
providing assistance in his own theory of normative measurement.
Hence the normative assumption of HCA alternatives is as follows-
Thirdly the differentiation methods of valuation are easily comparable with the terms
of the effect of the performance evaluation of the business units. Hence the important issue is
to majorly concern over the economical performance shown by an entity and to measure by
the historical cost or any other method of valuation. Thus for the other individual decision
making the decisions like the valuation method including the historical process has got under
the same conditions. An example of making decisions about keeping resources by the

10CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
decisions maker could likely be about knowing the resources and the net realisable value of
the actual resources.
Lastly the historical cost or sunk cost is not influential regarding the decisions to be
taken optimally. However there can be three reasons for judging the relevance of historical
cost to a decision.
Historical cost gives relevant sources to notion which is satisfying.
Historical cost is used as a basis for a decision objective imposed upon the decision
maker by his environment.
Historical cost is affected by the methods of evaluation and selection of the rules of
decision. Hence these normative assumptions are proven to be very much useful in this
context. Apart from this the strength, weakness and the possible threats as discussed are
proven to be very much useful in this context.
Critically evaluate whether any of the normative alternatives to HCA provide
information which is of greater relevance to users of accounting
The primary alternatives of HCA have been proposed during the main period which is
normative and related to the development of accounting theory during the years of 1960 and
1970. They were:
Current Purchasing Power Accounting (CPPA) – This method requires usage of
adjustment related to the inflation index of the non-monetary elements of the balance sheet.
Current Cost Accounting (CCA) – Use of replacement cost instead of historical costs.
Business profits hold gains but these gains were removed by the operating profit.
Continuously Contemporary Accounting (CoCoA) – Based on comprehensive use of
exit (market) prices. Profit is regarded as the difference that arise between the sums which are

11CURRENT DEVELOPMENT IN ACCOUNTING THOUGHT
adjusted through inflation. These sums constitute a part of the firm’s sum of market values
that arise between two periods of accounting. When a item is completely prepared to be sold,
the sales revenues are fully obtained. Other items such as goodwill are not reported anymore
in such cases.
On the whole, it could be properly stated that none of the above stated alternatives have
been successful. There have been constant criticisms of CoA and it did not take up any
change in profession although there was a requirement. Along with this another failure was
CCA which was not accepted due to presence of irrelevant replacement costs. Another failure
was CCPA which was proved to be an unsuitable replacement of HCA as no useful
information was provided by CCPA. The values provided in the information did not
specifically state any attribute of the accounting item.
Despite early support, none of CPPA, CCA or CoA ever came to be recognised as a
proper accounting standard. To be a proper accounting item, there should be clear evidence of
the characteristics of the items in the accounting concept constituting “fair value”
measurement. This measurement has been utilised broadly by various bodies that set
standards for accounting all over the world. Hence the normative alternatives try to provide
the HCA for the usefulness of accounting treatment. Thus in order to improve the value of the
accounting standard the normative approach is very much applicable to the process.
Conclusion
It can be concluded that the HCA have shown strong support for keeping the health
insurance subsidies for all the states saying the petitioners legal theory in the case of any
abrupt consequences. And since the current health reform policy had been changed hence the
overall revenue had been increased to $103 billion overall (Hines 1989: pp.72-92)
.