OLD formula, review

An asset is a name with a value on a line of the balance sheet. No more, no less. … Making an arithmetical difference between various assets, material fixed assets are being depreciated - don't ask how - while other assets get another treatment. … it is rather strange that (asset) A is being treated mathematically different from (asset) B, while the difference to one another is just the name, the line on the balance sheet. … Although being a social science, a key economical notion is 'money', a quantity that can be and must be counted and those counts have to fit, because no money unit can appear or disappear just like that. … more

Mentioned in many management accounting and finance texts: "A profit calculation system is by definition (…..) also a valuation system." This is the crux of the matter. It implies that the measuring data is polluted. … The necessary calculations - one system in this way, another system in that way - are digressive, and not user-friendly, although user-friendly application is one of the first requirements of a measuring instrument. Beyond the sensors, after the data-acquisition, the matter is signal compilation. Working out, processing, pure transforming of data, should be possible, regardless of the value of the signals, with one and the same algorithm. The detours that must be followed when working with the different profit calculation systems, have to be eliminated by the best possible algorithm. There is no reason whatsoever to do the calculations in a different way. Starting with any set of values and standards, they should be compiled in the same best way. … more 

Like traditional accounting (amongst which are the various GAAP-rulings), IFRS are also not measuring. When measuring the period profit of a company, calibration is the main problem. Only after completion of the calibration can one start measuring. Until then all outcomes are absolutely meaningless. … Yet at last, IFRS make a good start. For instance regulation IAS 19 'Employee Benefits' revolves around the true values to be entered onto each and every closing balance sheet. The difference of these values at start (i.e. the end of the former period) and end of the period under consideration is the NVD (Nominal Value Difference) belonging to this item, an entry onto the balance sheet. Where one sheep goes, all follow. From zero on, after subtraction of all value differences and taxes, net period profit remains. … more