Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107453
Authors: 
Braun, Eduard
Year of Publication: 
2014
Series/Report no.: 
TUC Working Papers in Economics 12
Abstract: 
The principles characterizing the traditional revenue-expense approach to accounting have never been “invented.” They are an institution that is the result of social evolution, not of human design. Therefore, the efforts to defend them against the balance sheet approach endorsed by standard-setters have encountered severe difficulties. The latter is based on a coherent model of the economy, namely neoclassical economics. This paper argues that a solid basis for explaining the rationale of the traditional accounting principles can be found in behavioral economics, especially in Prospect Theory. If one combines this result with a market process view of the economy, the revenue-expense approach turns out to be congenial to the organization of the market economy.
Subjects: 
Financial Accounting
Prospect Theory
Fair Value
Historical Costs
JEL: 
D03
M41
M48
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.