ABSTRACT
Accounting theory and practice have long suffered from diversity and controversy. There is wide agreement that it must be possible to greatly increase the usefulness of accounting and that the key to achieving this lies in improving accounting theory as a foundation for accounting practice. The accretion concept is neither complex nor difficult but has far reaching implications for accounting theory and practice. The accretion concept defines income as an increase in economic power which can be measured with reasonable objectivity. The principal differences among economic, accretion, and accrual concepts of income relate to realization. Economic present value income has no realization requirement; income arises with an increase in the “true” value of an asset. Accrual accounting income is income as measured by present generally accepted practice. This is a mixture of arbitrary rules and concessions to economic reality.
