ABSTRACT
The reason for the focus of financial accounting practice on the calculation of ‘profit’ (or ‘income’) and net assets is clear. All those who have an interest in, or are affected by, the activities of a business (or other organisation) are interested in its ‘performance’ and ‘financial situation’ (how well it is doing and is likely to do in the future) and in judging whether they are getting a fair and reasonable share of the wealth it is creating (or alternatively in ensuring that its success or failure is not unduly at their expense). Whether they are investors, employees, customers, government agencies or whoever, they want to know about the ‘wealth’ of the entity and changes in this wealth.
