ABSTRACT
This chapter observes and comments on the most recent historical developments in cash flow accounting (CFA). In the late 1970s and early 1980s, US accounting policymakers and standard-setters initiated a process to provide an addition to the conventional financial reporting set. The Kuhnian Revolution is well-known, and has been used previously by accounting historians. The conceptual efforts of Lawson and Lee continued in the United Kingdom (UK). Lawson's Conceptual Arguments Lawson's ideas on CFA have been consistently based on classical economic theory- specifically, that equity value is based on the equity-holder's perception of the future cash flow returns to be derived from the investment in question. The major difference between Lawson and Lee in this respect is that Lawson advocates an aggregate entity measure as a relevant and representationally faithful means of expressing future cash flows, whereas Lee prefers the relevance and reliability of market-based exit prices.
