What Is an Accounting Measurement?

The process of measuring various economic businesses and their results in monetary or other units of measurement. It is characterized by the relationship between quantities (mainly the amount of value expressed in monetary units) to determine the internal connection between items or matters, or to allocate the amount to specific matters. The key is the choice of measurement attributes and determination of measurement units. As an important part of financial accounting, the main contents of accounting measurement include assets, liabilities, owner's equity, income, expenses, costs, profit and loss, etc., and assets (liabilities can often be called negative assets, and owner's equity is an asset deduction Residual assets or net assets after debt) valuation and profit and loss decisions are at the core.

Accounting Measurement

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Measure items in currency or other units of measure

Accounting measurement

Among them, asset valuation requires the use of monetary amounts to determine and express the acquisition, use, and balance of various asset items; and profit and loss decisions refer to quantification and comparison to determine the transfer, consumption, or consumption of economic resources in the process of use.

Accounting Measurement. Should adhere to three basic quality standards: (1) homogeneity, that is, the quantitative relationship (reproduced) prompted by the accounting measurement should be related to the proposed

Cost measurement model is grafted on

Market globalization and demand dominance have become the main characteristics of contemporary economic development. The diversity of demand and the variability of the operating environment make companies have to strengthen their

The management of any enterprise can be divided into three levels: strategic management activities,

People at different levels of the company have different concerns, and top management is concerned about the relationship between the company and the operating environment and

In order to overcome the shortcomings of traditional accounting measurement concepts and meet the needs of new economic phenomenon measurement, we can establish new measurement concepts and measurement foundations for different situations from the following aspects.

Accounting measurement output values

The output value is based on the inflow of economic benefits that may be generated by the resource in the future as the value source of the resource, and the present value of time value as the measurement basis. It is mainly applicable to the measurement of human resources and the value of intangible assets.

The theoretical basis of output values is that the value of an asset is the present value of future cash inflows. An organization's focus on the value of an asset's output aims to optimize the allocation of resources and maximize the value produced in the future utility period. Instead of focusing on the past expenditures of the asset, the value of the output focuses more on the future output of the asset. This makes up for the lack of measurement from a historical perspective.

Accounting measurement utility values

The value of utility is based on the usefulness of a resource to a person or organization as a source of value, and to eliminate or compensate the costs incurred due to the possible consequences of the use of resourcessubstituting costs as a measurement basis. It is mainly applicable to the measurement of the value of environmental resources.

Utility values can be found in Western economics. In Western economics, value means "characteristics in which wealth and material are useful and scarce to humans" (Edited by Ichiro Nakayama and others: "Economic Dictionary". Direct measurement of "usefulness" is very difficult and can be Consider using indirect cost for indirect measurement. The purpose of paying attention to utility value is to maintain and maintain the good state and ecological balance of natural resources, taking into account both economic and social benefits, and avoiding the depletion of resources caused by predatory consumption of resources. Avoid environmental damage caused by environmental pollution.

Accounting measurement scarcity values

The value of scarcity is based on the scarcity of resources or the uniqueness as the source of value, and the price of the scarce resource recognized by the main quotation of the owner of the scarce resource and the recipient, and the price negotiated and negotiated by both parties-the agreed price as the basis of measurement. It is mainly applicable to the measurement of special and rare resources such as singer singing, model performances, celebrity calligraphy and painting, rare minerals, plants and animals.

The scarcity value is based on the reality of abnormal supply and demand, and is based on "things are scarce as valuable". The agreement price formed by the two parties does not have broad agreement, and different people often have huge differences in the measurement results.

Accounting measurement preservation values

The value of preservation is based on the value of the investment required to regain an asset, and the current replacement cost as the measurement basis. This concept and basis solves the problem of the deviation between the original value of the asset that has been purchased for a long time and the market value, so that physical capital can be preserved. It is applicable to the valuation of fixed assets such as machinery and equipment, buildings, etc.

The theoretical basis for the preservation of values is the theory of capital preservation, to avoid low valuation of assets due to price changes, and to maintain simple reproduction of fixed assets. Under the preservation value, in addition to the current cost measurement basis, a purchasing power (general price index) can also be used as the measurement basis.

Accounting measurement market values

The market value is based on the assumption that the cash inflow of the normal sales of resources at that time is used as the basis for measuring the value of the asset, and the sale price or realizable value is used as the measurement basis. It is mainly applicable to occasions that concern the liquidity of corporate assets.

Market values are based on the theory that modern enterprises must have the ability to respond to rapid changes in the social and economic environment. Only in this way can they ensure the competitiveness, solvency and resilience of enterprises, which is related to the realisability of corporate assets. Related. Realized value represents the amount of cash that the company can recover in the near future, so that the realization of benefits, cost compensation, and payment convenience.

Accounting measurement risk values

The value of risk is the source of value based on the risk generated by speculators' huge uncertainty of the transaction object, and the amount of asset exchange or debt settlement based on a fair transaction between two parties who are familiar with the situation and voluntarily-fair value is used as the basis for measurement . It is mainly applicable to the measurement of the value of derivative financial instruments.

The risk value is based on the equilibrium of risk and reward. Due to the uncertainty of future events in the fiercely competitive market, people have inherent requirements to eliminate, transfer, and diversify risks; due to the large uncertainty of future transaction events, the possibility of loss is high, so corresponding requirements are high In return. The value of financial instruments is subject to rapid changes due to various factors. In addition, when the transaction contract is signed, the cost value is not the same as that of traditional commodity purchase and sale. How to measure this symbolic economic transaction instrument has become a century-old problem. Until now, it has been difficult for the accounting community to find the ideal measurement method to confirm its value. After a long period of research and discussion, the international accounting community has reached a preliminary understanding: measuring at fair value, which is a better choice at the current level of recognition.

The innovation of the concept of accounting measurement is not only an objective need of social and economic development, but also an opportunity for accounting development. It will definitely bring a strong impact to traditional accounting and bring accounting into a brand new world.