Chapter

The Limitations of Financial Reporting

Wolfgang Ballwieser

in The Economics and Politics of Accounting

Published in print March 2004 | ISBN: 9780199260621
Published online January 2005 | e-ISBN: 9780191601668 | DOI: http://dx.doi.org/10.1093/0199260621.003.0003
 The Limitations of Financial Reporting

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After a general introduction (Section 1), Section 2 discusses the objectives of financial reporting with respect to information. It explains the concept of decision usefulness by looking first at the individual decision-model, and then at the measurement of economic wealth or income using financial statements. Section 3 briefly examines some of the attempts that have been made to test decision usefulness empirically, and gives an overview of some of the results. Section 3 is the conclusion.

Keywords: accounting; decision usefulness; economic wealth; financial reporting; income; individual decision-model; information; measurement of economic wealth; measurement of income

Chapter.  8035 words.  Illustrated.

Subjects: Financial Markets

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