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The relationship between accounting profit and economic income

Journal Article


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Abstract


  • The reliance on economic concepts, most notably economic income, for the measurement of profit in financial accounting is misplaced. This paper explores the concept of economic income, contrasting it with the concept of profit in the conventional accounting model. The concept of individual economic income cannot be used for measurement of profit for a past period as the concept is based on the capitalisation of expectations and excludes “separate but correlated” concepts of profit and capital needed for capital maintenance.

UOW Authors


  •   Ryan, John B. (external author)

Publication Date


  • 2007

Citation


  • Ryan, J. (2007). The relationship between accounting profit and economic income. Australian Accounting Review, 17 (43), 33-46.

Ro Full-text Url


  • http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1623&context=buspapers

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/621

Number Of Pages


  • 13

Start Page


  • 33

End Page


  • 46

Volume


  • 17

Issue


  • 43

Abstract


  • The reliance on economic concepts, most notably economic income, for the measurement of profit in financial accounting is misplaced. This paper explores the concept of economic income, contrasting it with the concept of profit in the conventional accounting model. The concept of individual economic income cannot be used for measurement of profit for a past period as the concept is based on the capitalisation of expectations and excludes “separate but correlated” concepts of profit and capital needed for capital maintenance.

UOW Authors


  •   Ryan, John B. (external author)

Publication Date


  • 2007

Citation


  • Ryan, J. (2007). The relationship between accounting profit and economic income. Australian Accounting Review, 17 (43), 33-46.

Ro Full-text Url


  • http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1623&context=buspapers

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/621

Number Of Pages


  • 13

Start Page


  • 33

End Page


  • 46

Volume


  • 17

Issue


  • 43