Essays on Measurement in Accounting Coursework

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The paper "Measurement in Accounting" is a good example of a finance and accounting coursework.   The value of goods is measured in terms of money. Accounting is a prehistoric quantification of processes made up of every day’ s transactions between financial entities hence accounting models which entail such transactions ends up having their counterparts in a true economic world. Therefore accounting dynamics are effectual tools for improving, analyzing, predicting, and depicting the real state of resource distribution in the social system. Accounting measurements has special implications on the nature of the social processes, thus it has three basic necessities.

First, it has to have a monetary scale which is a universal denominator to assess all the activities but the value for each monetary unit changes with its considerable power of purchasing which depends on the chronological date of a business deal. The second necessity is the distinctive measurement of double-entry bookkeeping. Transactions are measured by applying a monetary unit and recording in the debtor and creditor columns of corresponding accounts and the sum total of both columns should be equal. The last requirement is accountability; this means the social obligation of a steward reporting his economic performance to the equity owner.

Thus accounting measurement is not just valuing goods or services, but also confirms a human relationship concerning charges and discharges accountability through performance evaluation of measurements (Haldane, 2004). Accounting measurements and global crisis Accounting measurements greatly contributes to today’ s financial crisis and the greatest criticism is seen from the point of view of the methods applied to account for financial instruments and the need to fairly value them. For example, in US accountants and financial directors were summoned before boards so as to explain why the earnings had started to deteriorate and the big losses in the re-measurement of the fair value.

The United States home loans, a house in specification special purpose vehicles began to default due to reducing house prices and as a result a number of financial institutions holding the lowest credit values that had opted these vehicles instead of paper experienced great losses. This clearly indicates that the market for the low-quality paper diminished leading to a decrease in the fair value of the paper. The effects of the subprime crisis spread throughout the world, for instance, European financial institutions had a share of the low-quality paper so as to be part of the profitable market.

Therefore when the market of the papers went down the Europeans also recorded extensive losses. This led to a global financial crisis; the disaster having begun with the well-established entities was transferred to the growing nations which depend on them (Choi & Frost, 2002). Currently, wide political pressure reinforced by the world of business from European and US Congress is forcing both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) to accelerate the timetable to rewrite the provisions of the financial instruments standards. As we have indicated earlier one of the requirements of the accounting measurement is accountability which at the beginning of the accounting period is charged on the debtor side of the balance sheet as the total of assets and discharged o the credit side to show the profit made.

The bodies responsible for accounting, for example, the IASB had to sit down and review the off-balance sheets.

When this was started some positive effects were felt in the market through much attention is needed to change the economic status (Jefferson, 2003).


Zyla, L. M., 2009, Fair Value Measurements: Practical Guidance and Implementation, John Wiley and Sons, New York.

Jefferson P. J., 2003, Global Economics Crisis Resource Center, 2009, Global Economic Crisis: Impact on Accounting, Cengage Learning, London.

Springer International, 2001, The International journal of accounting, Volume 35, University of Michigan, Michigan.

Haldane, A. G., 2004, Fixing financial crises in the twenty-first century, Routledge, New Jersey.

Choi, F.S. & Frost C. A., 2002, International accounting, Prentice Hall, California.

International Monetary Fund, 2005, Global Financial Stability Report-market Developments And Issues. International Monetary Fund, Washington DC.

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