Current Cost Accounting and its Revival in Ed-82 - a Reappraisal
Posted: 31 Mar 1999
Abstract
This paper reviews previous research on New Zealand's 1980s current cost accounting (CCA) experiment and re-examines the reasons given for its failure. It notes a link between the business community's support for and then rejection of the standard, and the government's consideration and then rejection of CCA for taxation and price control purposes. After CCA's demise the accounting profession adopted a set of concepts which suggested rejection of CCA principles in accounting. CCA principles have, however, been revived by New Zealand's light-handed regulatory regime for the pricing of infrastructural services. Despite the accounting profession's conceptual developments, ED-82 Accounting for Property, Plant and Equipment suggests that standard-setters are willing to oblige those who wish to extend CCA principles to financial reporting. This paper questions the appropriateness of this development.
JEL Classification: M41, M44
Suggested Citation: Suggested Citation