Essays on Measurement in Accounting Coursework

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The paper 'Measurement in Accounting " is a great example of finance and accounting coursework. Accounting is generally defined as the art of identifying, recording, classifying and summarizing in terms of money, event and transactions which are of a financial character and interpreting the results thereof. It is very important to note that only those events and transactions which can be measured in terms of money are recorded in books of accounts. From this accounting principle, any fact or occurrence which cannot be expressed in terms of money is not possible to record in the accounting books. In any country, the measurement unit shall be the base money unit of that country or the most relevant currency.

For example, due to hyperinflation levels in Zimbabwe, the local currency has lost its value and this affected the economic viability of the currency. The economists have decided to introduce the US dollar as the currency. The main objective is to make the accounting records relevant since it would not be easy for comparison of records of different entities in and outside the country for an unstable currency like that of Zimbabwe.

Accounting is not a recent discovery in the world but it dates back more than 7000 years. It was first discovered in the Middle East where farmers used to keep simple records of their livestock and crop production. Accounting has gone through major developments since then and there has been much debate on which is the best way of reporting accounting information. Accounting Information is very crucial to various stakeholders of the economy and each one of them uses it for a different purpose.

Among the interested groups of accounting information of an organization include the management, shareholders, government, creditors, potential investors, and the public. All these groups need this information so that they can be able to make sound decisions on their stake in the reporting entity. Therefore it is very important for the information included in the accounting books be fair and true so as not to mislead. To achieve this, accountants should ensure that they adhere to the accounting principles and any assumption is well articulated and generally acceptable. Though there have been many achievements in the accounting profession, measurement issues continue to disturb the minds of experts.

It is not clear which is the best method of measurement and under what circumstance. Historical accounting is the earliest method of recording accounting data. But expert argues that this method sometimes may be misleading and can be deceitful on certain circumstances. For example, recording the value of an asset on its original price is going to show untrue value in the balance sheet. Though depreciation may be deducted in reality, the asset may not fetch the same price in the market today.

On the other hand, fair value may also not be the best way to record the value of the same asset in the balance sheet. This is because, in economics, the price is determined by various factors and these factors are deemed to change from time to time. Therefore the price of the asset today may change tomorrow.


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John Wiley & Sons Australia. Forster, J. 2010, ‘The Global Financial Crisis’, John Wiley & Sons Australia. Reading list:

1.Laux, C & Leuz, C 2009, 'The crisis of fair-value accounting: Making sense of the recent debate', Accounting, Organisations & Society, vol. 34, no. 6-7, pp. 826- 834. 2.

Liu, J & Taylor, D 2008, 'Legitimacy and corporate governance determinants of executives' remuneration disclosures', Corporate Governance, vol. 8, no. 1, pp. 59-72. 3.

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Cuganesan, S & Ward, L 2008, 'Industry specific social and environmental reporting: The Australian Food and Beverage Industry', Accounting Forum, vol. 32, no. 1, pp. 1-15. 6.

Kuruppu, S & Milne, M 2010, 'Dolphin deaths, organisational legitimacy and potential employees' reactions to assured environmental disclosures', Accounting Forum, In Press,

Corrected Proof. 7. MacKenzie, D 2009, 'Making things the same: Gases, emission rights and the politics of carbon markets', Accounting, Organisations & Society, vol. 34, no. 3-4, pp. 440-455.

8. Biondi, Y & Suzuki, T 2007, 'Socio-economic impacts of international accounting standards: an introduction', Socio-Economic Review: Special Issue: The Socio Economics of Accounting, vol. 5, no. 4, pp. 585-602.

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