Research assignment:
The impression one gains from internal discrepancy of many of the arguments on which the justification of conventional accounting, is made to rest is strongly reminiscent of the underlying philosophy of rulers of Oceania in the George Orwell’s 1984. The distinctive characteristic of this philosophy is doublethink. Doublethink signifies the power of holding two contradictory beliefs in one’s mind concurrently and accepting both of them. Two illustrations are ‘Valuations are incorporated in the balance sheets, however the balance sheet is not a valuation document’ and ‘Fixed assets must be carried at cost….in historical cost, unless such cost is no longer meaningful’.
[Chambers, R. (1969) ‘Implications of asset valuations and bonus issues’ in Accounting, Finance and Management, Sydney, Butterworth’s, p.122]
Required:
Describe the above quotation, specifically as it applies to the non-current assets. Do you consider Chamber’s assertion is justified? Illustrate.