ABSTRACT
The new conception of profits has been pressed strongly by economists, industrialists and a growing number of accountants, and the objects are to overcome the adverse effects of the rising price level and to reduce the crushing burden of taxation upon industry and commerce. If the new conception were accepted and were drafted into our Company law, as would seem to be necessary, then the alterations in the fundamental bases of accounting would represent a complete revolution. The advocates of the new conception contend that it should be applied to the calculation of profits or losses for taxation purposes. The accounts of companies are used for many different purposes and the purpose for which the figures are required governs the accepted conventions upon which they are based. The published accounts of a company in this country are drawn up in accordance with the provisions of the Companies Act and the regulations of that company.
