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On the invariance of accounting principles to business models: a discussion of the Singleton-Green and Page articles

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  • Joshua Ronen

Abstract

Let me first begin by saying that I agree in general with Brian’s proposition that the theory of the firm provides insights into requisite financial reporting systems. I also agree with Mike’s characterization of business models as diverse, subjective, and mostly aspirational and if I may add, essentially vacuous. I disagree with the notion that financial reporting and recognition and measurement principles should be tailored to business models. Rather, I shall make the argument that recognition and measurement principles should be invariant to diverse business models. Indeed, the theory of the firm would suggest universal recognition and measurement principles that apply independently of the business models. The role of business models, I contend, is to facilitate proper quantifications—the required output of applying the universal recognition and measurement principles. Copyright Springer Science+Business Media New York 2014

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  • Joshua Ronen, 2014. "On the invariance of accounting principles to business models: a discussion of the Singleton-Green and Page articles," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(3), pages 707-716, August.
    • Handle: RePEc:kap:jmgtgv:v:18:y:2014:i:3:p:707-716
    DOI: 10.1007/s10997-012-9241-6
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    References listed on IDEAS

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    1. Ronen, Joshua & Sorter, George H, 1972. "Relevant Accounting," The Journal of Business, University of Chicago Press, vol. 45(2), pages 258-282, April.
    2. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    3. Klein, Benjamin, 1980. "Transaction Cost Determinants of "Unfair" Contractual Arrangements," American Economic Review, American Economic Association, vol. 70(2), pages 356-362, May.
    4. Ronen, Joshua, 1974. "Social costs and benefits and the transfer pricing problem," Journal of Public Economics, Elsevier, vol. 3(1), pages 71-82, February.
    5. Williamson, Oliver E, 1971. "The Vertical Integration of Production: Market Failure Considerations," American Economic Review, American Economic Association, vol. 61(2), pages 112-123, May.
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    Cited by:

    1. Palea, Vera & Biancone, Paolo Pietro, 2017. "Which Accounting Rules for Economic and Social Sustainable Development? Engaging Critically with IFRS Adoption in the EU," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201733, University of Turin.
    2. Palea, Vera, 2018. "Financial reporting for sustainable development: Critical insights into IFRS implementation in the European Union," Accounting forum, Elsevier, vol. 42(3), pages 248-260.

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