Get Rich City - Accounting Reform

Accounting Reform

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Accounting reform is an expansion to accounting rules that goes beyond the realm of financial measures for both individual economic entities and national economies. It is advocated by those who consider the focus of the present standards and practices wholly inadequate to the task of measuring and reporting the activity, success, and failure of modern enterprise, including government. The basic bookkeeping concepts underlying contemporary accounting date back about 500 years to Renaissance Italian practices. Obviously, the vast majority of articulations by modern standard setters have little in common with the accounting practices then used. Real debate concerns concepts such as whether to report transactions, such as asset acquisitions, at their cost or to report them at their current market values. The former, traditional approach, appeals for its reliability but can quickly lose its relevance due to inflation and other factors; the latter, increasingly common approach, appeals for its relevance but may be less reliable due to its resort to appraisals or other subjective measures. This trade off is essentially impossible to overcome. The relative virtue of either approach depends on the subject matter in question.

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