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KMID : 0615219760030010137
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Journal of Kwangju Health
1976 Volume.3 No. 1 p.137 ~ p.159
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A STUDY OF ACCOUNTING ON THE EVALUATION OF ASSETS
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Lee-Yong-Ho
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Abstract
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Valuaton has long been one of the most important problems in accounting. Much has been discussed about it and various valuation basis and methods have been developed and argued for each in accounting profession.
Despite these long- and serious discussion about valuation, the outcome of the accounting measurement process which is supposed to represent fairly the business income and financial position is believed to be far from satisfactory to the users of accounting information.
It has once been strongly argued that accounting is basically not the valuation process, and that valuation itself is not a fundamental function in accounting.
But different valuation basis or method results in different accounting figures. Thus, valuation, although not a fundamental function, is a very important problem area in accouting.
Accounting measures are expressed in monetary terms, they usually understood as something related to the economic value, which in today´s monetary economy is measured by-monetary unit.
Therefore as we studied chapter 1-0. it seems to be necessary to point out some problems to cost basis theory from this view point of gereral information system. And I sujest some points as follows:.
First of all, In calculation structure;
The traditional cost basis was helpful in the realization of ´ the purposes of system accounting, but now, it is better to substitute it for the current price basis or market price basis, which has many profitable characters necessary for the interested persons to be helped in decision making.
The best way, however, should be the multi-dimentional estimation basis which is adopting the advantage from both cost basis and current price basis. Secondly, in the evaluation of assets.
It is recommandable to adopt deductive accounting- principle in place of the inductive accounting principle, while the latter has given the importance on the generally accepted or the traditional experimentalism, the former on the theoretical, rational and scientific thinking.
Lastly in the choice of the valuation basis:
The .choice of valuation basis is basically a selection of a set of assumptions concerning the accounting purpose.
Each set of assumptions related to the time of exchange, type of market and form of goods or services exchanged has its own unique meaning, and therefore each valuation basis has its merits depending- on the purposes it is intended to be used for. A valuatin basis cannot serve all the purposes best and accounting cannot satisfactory carry out its objectives with one best valuation basis.
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