AGGRESSIVENESS AND CONSERVATISM IN ACCOUNTING POLICIES SELECTION
Supp/2008 , p720..728
Author(s):
Mihai RISTEA
Corina Graziella DUMITRU
Alina Mihaela CURPĂN
Keywords:
Earnings, risks, cash income, aggressiveness in the selection of accounting policies, conservatism in the selection of accounting policies, selection game
Abstract:
The theory and the specific accounting practice, as Hennie Van Greuning shows, have generated the rule-principle: “the more aggressive the accounting methods, the lower the quality of earnings; the lower the quality of earnings, the higher the risk assessment; the higher the risk assessment, the lower the value of the company being analyzed.” In the spirit of this collocation, our paper intends to present the selection criteria (the selection game) for the accounting methods of evaluation and of measurement of an accounting entity’s financial position and performance. The given criteria oscillate between aggressiveness and prudence in the income evaluation. The relationship between benefit and risk in the preservation and development of entity’s wealth, the comparison between the accrual and the cash income, the conflict between the maximization of the entity's value and the benefits, the accounting and financial aspect of a business, the option between net assets’ value and economic added value, the money value’s changing in time, the taxation policy influences on the accounting methods, the profitability and the risk of the new investments, and portfolio selection criteria remain opened subject to be discussed.
Download:
Back
|
|