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A Revised Lesson for Accounting Measurement from Transaction Cost Economics
Author(s) -
Shailer Greg,
Wilson Mark
Publication year - 2003
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.1835-2561.2003.tb00221.x
Subject(s) - transaction cost , incentive , balance (ability) , balance sheet , production (economics) , historical cost , asset specificity , corporate governance , accounting , economics , database transaction , asset (computer security) , internalization theory , microeconomics , cost accounting , business , industrial organization , accounting information system , finance , medicine , computer security , computer science , programming language , physical medicine and rehabilitation
This paper disputes the view, put forward in an earlier issue of Australian Accounting Review, that transaction cost economics (TCE) shows that market values of assets are not appropriate in balance sheets and that the usefulness of balance sheets is therefore diminished. This view ignores the role of production costs, complexity and contracting costs in asset‐ownership decisions, which reflect various incentives, including a trade‐off between production costs and transaction governance costs. In fact, TCE theory lends some support to the provision of market values.