Deconstructing an accounting paradigm shift: AASB 116 non-current asset measurement models
by Gregory K. Laing; Ronald W. Perrin
International Journal of Critical Accounting (IJCA), Vol. 6, No. 5/6, 2014

Abstract: This paper is a deconstruction of the cost and fair value models implicit in the Australian Accounting Standard (AASB 116), derived from the International Accounting Standard IAS 16. The paper examines the justification for the paradigm shift through the lens of the very framework that supports each accounting model. The analysis renders visible the contradictions embedded in the models, raising serious doubts about the ability of either model to provide financial information that is sufficiently relevant or reliable to be any more useful to potential users than the historical cost model that they have usurped. In this regard the standard fails to provide any benefits to warrant the paradigm shift.

Online publication date: Wed, 15-Apr-2015

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