TY - JOUR
T1 - Clarifying funds statements - the two entity test
AU - McKinnon, Jill L.
AU - Martin, Carrick A.
AU - Partington, Graham H.
PY - 1983
Y1 - 1983
N2 - A major shortcoming of the funds statement prepared under a resources concept is that the meaning of the term “resources” is unclear. A transaction test is usually adopted to identify entries involving funds, but it is apparent from published reports and from the Australian profession's recent exposure draft that substantial confusion remains. One response has been to reject the broader concepts in favour of narrower definitions such as cash or working capital. In this article, however, it is argued that an all resources funds statement, properly defined, has an important contribution to make. A “two entity” test is proposed which is claimed to be tighter and closer to the spirit of the original resources concept than the present transaction test.
AB - A major shortcoming of the funds statement prepared under a resources concept is that the meaning of the term “resources” is unclear. A transaction test is usually adopted to identify entries involving funds, but it is apparent from published reports and from the Australian profession's recent exposure draft that substantial confusion remains. One response has been to reject the broader concepts in favour of narrower definitions such as cash or working capital. In this article, however, it is argued that an all resources funds statement, properly defined, has an important contribution to make. A “two entity” test is proposed which is claimed to be tighter and closer to the spirit of the original resources concept than the present transaction test.
UR - http://www.scopus.com/inward/record.url?scp=84985582648&partnerID=8YFLogxK
U2 - 10.1111/j.1467-629X.1983.tb00226.x
DO - 10.1111/j.1467-629X.1983.tb00226.x
M3 - Article
AN - SCOPUS:84985582648
VL - 23
SP - 79
EP - 87
JO - Accounting & Finance
JF - Accounting & Finance
SN - 0810-5391
IS - 1
ER -