ABSTRACT
This chapter concentrates on comparisons between historic cost, current cost and cash flow bases of reporting annual income, a statement of financial affairs which is completely consistent with cash flow accounting can readily be devised. The cash flow method of reporting past or prospective financial performance on a going-concern basis avoids any confusion between the functions of the income statement and balance sheet and certainly does not imply that all variants of the balance sheet concept should be cast overboard. The cash flow accounting (CFA) model therefore explicitly allows for the existence of the individuals who are entitled to the proprietorship income which the historic cost-based conventional accruals accounting model (CAAM) allegedly measures. The foregoing analysis represents at least part of the logical basis of a corporate accounting model which is consistent with observable reality and which has as its main aim the reporting of financial performance from a proprietorship standpoint.
