Order Positive accounting theory Positive accounting theory PAT is a general term for any theory that provides descriptive information regarding the behavior of accountants.
Email Firstly, your humble writer, who was distracted first by untimely though much enjoyed reserve duty, and then quite a heavy workload, failed to convey his profound and at the time prophetic commentary on important recent events; Putin and Ukraine, the capture of El Chapo, and so forth.
Though we shall hopefully revisit some of these in any event, a good way to get back Financial accounting theory ball and rhythm is write about a subject less pressing on the clock. Warren Mosler leading their charge, have caused quite a stir, at least among the more thoughtful part of the electorate.
Firstly, we must point out that for the most part, proponents of MMT insist that it is not an ideology or even a proponent of any specific economic policy, but rather merely aims to describe the way money works in the modern world; hence Modern Monetary Theory.
Specifically, they refer to a fiat currency regime with the fiat as legal tender, and taxes with a free-floating exchange rate. It is in some part derived from earlier theories known as chartalism stating that a completely inherently worthless currency can derive value from its sole acceptability to extinguish tax liabilities my favorite example of that is Tally sticks, should write on those on another occasion.
All is well and good there. In many respects, it MMT has gained popularity as a strikingly counter-intuitive backlash against the current emphasis on deficits and national debt.
Treating a government, who issues its own currency, as a household is simplistic and misleading they claim. The US cannot run out of dollars, it creates them at whim. The idea of fear of default and bankruptcy at least unintentional default and bankruptcy is absurd.
A nation can pay any bill denominated in its own currency regardless of how large. Furthermore, MMTers are convinced mainstream economists are also victims of this intellectual fallacy, not so much due to oversimplification and their treatment of governments like households who must balance their monthly budgets as they believe the majority of the electorate does, but rather due to being stuck in classical and older theories of economics developed under a different set of circumstances.
From left to right, be it mercantilism, Marxism, Maoism, Meynard Keynes, Adam Smith or Austrian economics, none existed under fiat free floating exchange systems.
The great bulk of economic thought was developed during the gold standard, similar commodity money systems, or at least under fixed exchange systems.
We must remember, the US dollar was not truly off the gold standard and floating until the Nixon Shock and the end of the Bretton Woods Era ; hardly 40 years of this modern fiat period. The great economic thinkers on all sides, overwhelmingly lived and wrote before this period.
A nation whose national debt is payable by its own floating fiat currency cannot unintentionally at least default on it. They go much further and claim that the only reason people can have any money at all, is because the government has run a deficit! Without too much further elaboration, some key points that MMT generally supports can be best shown by Mr.
It does not have to tax you to get money it created itself to begin with. As he puts it: Collectively, in real terms, there is no such burden possible.
Debt or no debt, our children get to consume whatever they can produce. Federal Government budget deficits ADD to savings. Investment adds to savings. Warren Mosler — Leading advocate of MMT As you can see, the main theme here is that a country can make as much money, at least its own money, as it wants and deficits are not the nightmare we are all led to believe.
Firstly, what MMT states, and specifically the way it states it, leads anyone who believes it to realize deficits are not only not bad, but necessary, and that massive government spending is imperative for a healthy economy.
In fact, most leading members of the MMT camp, frequently support policy measures usually quite progressive that are often quite unorthodox if not radical, and it is easily seen that they rest on a foundation of not being concerned with government spending levels or deficits.
For example, Mosler proposes or has proposed a national 30 mile per hour speed limit, to stop worrying about solvency deficits and debtincrease government spending or lower taxes ie increase deficits to fill the output gap, eliminate tax advantages encouraging savings and retirement plans, legalize all recreational drugs, government funded health care for all and of course a guaranteed federally funded job for anyone willing to work pretty sure the USSSR had that one!
To be fair, MMTers, at least the more intelligent ones Mr. My favorite illustrative point that Mosler makes is explaining that the government shreds the cash it receives from fees, taxes or the sale of securities.
The government regularly shreds old bills and prints new ones for example. This could be shocking to many people, as obviously we do not know of businesses that would shred those precious 20 or dollar bills it collects from consumers. The Typical Critics All of this has generated plenty of critics on the right and left; mostly because the implications of MMT seem counterintuitive and following them it seems, would lead a country to financial ruin.Firstly, your humble writer, who was distracted first by untimely (though much enjoyed) reserve duty, and then quite a heavy workload, failed to convey his profound and (at the time) prophetic commentary on important recent events; Putin and Ukraine, the capture of El Chapo, and so forth.
Financial Accounting Theory Seventh Edition William R.
Scott Purpose: To create an awareness and – Ball and Brown study, method and findings, stock price moves before • Financial accounting issues leading up to the market meltdowns – Fair value accounting for financial instruments. Accounting, Organizations and Society.
Vol. 5, No. 1, pp. Pergamon Press Ltd, Printed in Great Britain. THE ROLES OF ACCOUNTING IN ORGANIZATIONS AND SOCIETY* STUART BURCHELL, COLIN CLUBB, ANTHONY HOPWOOD, JOHN HUGHES London Graduate School of Business Studies and JANINE NAHAPIET Oxford Centre for Management Studies Abstract The .
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Dear Twitpic Community - thank you for all the wonderful photos you have taken over the years. We have now placed Twitpic in an archived state. Chapter 1 – Financial Accounting Theory What is Financial Accounting Theory?
Henderiksen () – Theory is defined as: A coherent set of hypothetical, conceptual and pragmatic principles forming the general framework of reference for a field of inquiry.