Title: The identity of accounting profit - a trial of criticism to accounting

Authors: Masaya Fujita

Addresses: Kyushu University, Motooka 744, Nishi-ku, 819-0395, Fukuoka City, Japan

Abstract: To determine profit, we must subtract expenses from revenue. Why do we have to compute profit indirectly? Why can profit neither be touched nor seen? And what is accounting profit? These questions are important for financial accounting researchers. Below offers answers by analysing and identifying the characteristics of computing profit. Surplus value is the essence of profit. Its expression is frequently used in analysing capitalism, but it has existed from the start of human labour. Without it, there could be no ancient remains or increases in population. In this paper, 'surplus' is used instead of surplus value and accounting profit. The individual, historical and tangible form of surplus, is determined by double-entry bookkeeping (Fujita, 2002, 2017), i.e., it is the difference of capital at the beginning and the period end (computed on the balance sheet), and the difference of revenue and expenses (computed in the profit and loss account). Accounting profit is the individual, historical and concrete forms of surplus but what is a surplus is problematic. This paper asserts that it comes from the deprivation from nature (the earth) and the effects of accounting on economic actions can threaten the future of humankind.

Keywords: accounting profit; surplus; only one cost; labour cost; depletion of resource and energy; deprivation from the earth; exhaustion of resources.

DOI: 10.1504/IJCA.2024.142797

International Journal of Critical Accounting, 2024 Vol.14 No.1, pp.1 - 7

Received: 08 Apr 2023
Accepted: 11 Mar 2024
Published online: 22 Nov 2024 *

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