ABSTRACT
The accounting techniques discussed so far have had as their objective the measurement of business income on alternative bases within the traditional framework of the annual profit and loss account and balance sheet. This applies equally to historic cost and value accounting, in each of their various forms. This applies equally to historic cost and value accounting, in each of their various forms. Moreover, both historic cost and value accounting are based on the accrual convention under which revenues and expenditures are entered in the accounts. Under a cash flow accounting system, entries would be made in the accounts of a company when cash was received or paid out. Similarly the cash spent on acquisitions of materials, fuel, stock and all other factors would be charged in full at the point of outgoing. The main difficulty is to accommodate the technique within the conventional form of presentation of annual profit and loss accounts and balance sheets required by the law.
