Realism in accounting

The paper stresses the need for realism, and touches on the widening range of accounting tools, including transaction accounts and measurement accounts. The concept of physical flow accounts is introduced, including the aspects of energy and manpower accounting. The periodicity of various physical events is reviewed, and the desirability of accounting statements reflecting longer periods than a single year. The weighted-index method of measuring productivity for an entire factory is described, and certain misapprehensions are elucidated. The absence of much information about physical assets (fixed assets and inventories) is commented on, and certain analyses are suggested, including the use of the `pension date¿¿ for fixed assets, as a starting point for renewal and the financing thereof. The paper concludes with the opinion that accounting will be of greater service to mankind, the nearer it can be brought to the stage of becoming a science. The paper is one of a series on this theme.