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SAC 4 A nd T he C hallenge T o T he M andatory S tatus O f C oncepts S tatements
Author(s) -
Miller Malcolm C.,
Loftus Janice A.
Publication year - 1993
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.1993.tb00139.x
Subject(s) - accounting , statement (logic) , revenue recognition , financial statement , equity (law) , financial statement analysis , interpretation (philosophy) , business , unrest , revenue , actuarial science , financial accounting , financial ratio , political science , law , linguistics , philosophy , accounting information system , audit , politics
This paper expresses no doubt about the worth of concepts statements such as Statement of Accounting Concepts SAC 4 Definition and Recognition of the Elements of Financial Statements, which spells out the essential characteristics of assets, liabilities, equity, revenues and expenses along with broad criteria for their recognition in financial statements. However, the authors have reservations about giving mandatory status to such a statement. It is, after all, but one piece of a conceptual framework and as the other pieces take shape they may call for alterations in the interpretation and operation of the elements. Without the benefit of the light which might be cast by reference to other concepts statements, SAC 4 in isolation could lead to undebated and questionable consequences, as well as supplying equivocal guidance on many important issues. This paper examines the reasons for unrest about the mandatory status of concepts statements.