BUACC2606 Financial Accounting
Summer Semester 2013/14
Ã¢â‚¬Å“The impression one gains from the internal inconsistency of many of the arguments upon the which justification of conventional accounting, is made to rest is strongly reminiscent of the underlying philosophy of the rulers of Oceania in George OrwellÃ¢â‚¬â„¢s Nineteen Eighty-Four. The distinctive feature of this philosophy is doublethink. Doublethink means the power of holding two contradictory beliefs in oneÃ¢â‚¬â„¢s mind simultaneously, and accepting both of themÃ¢â‚¬Â. Two examples are Ã¢â‚¬Å“ Valuations are incorporated in balance sheets, but the balance sheet is not a valuation documentÃ¢â‚¬Â and Ã¢â‚¬Å“ Fixed assets should be carried at costÃ¢â‚¬Â¦in historical cost, unless such cost is no longer meaningfulÃ¢â‚¬Â, [Chambers, R. (1969) Ã¢â‚¬ËœImplications of asset valuations and bonus issuesÃ¢â‚¬â„¢ in Accounting, Finance and Management, Sydney, Butterworths, p.122]
Discuss the above quotation, particularly as it applies to non-current assets. Do you consider ChamberÃ¢â‚¬â„¢s assertion is justified?