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Showing posts with label Variable item game: Accountants - Scorekeepers or players?. Show all posts
Showing posts with label Variable item game: Accountants - Scorekeepers or players?. Show all posts

Monday 21 September 2009

Variable item game: Accountants - Scorekeepers or players?

As we stated before: The accounting game is played on three fields:

1. Monetary item field
2. Variable item field
3. Constant item field

We already know that accountants are important players on top of being the official scorekeepers in the monetary item game. Accountants are thus naturally good at multi-tasking in the monetary item game: scorekeepers by training as well as value keepers because of their specialized knowledge of the subject matter of monetary items.

Accountants are always multitasking: they always value everything they account - there are different ways of valuing items - and they are always scorekeepers by training.

They are never just scorekeepers no matter what the accounting professors say. They are dead wrong. They can be rewarded as Emeritus Professor of Accounting at all universities in South Africa. They will still be dead wrong stating that accountants are simply scorekeepers of past events.

Now let’s scrutinize the variable item game.

Variable items have variable real non-monetary values over time. Examples are property, plant, equipment, raw materials inventories, finished goods stock, foreign exchange, etc. Accountants value them at market value, fair value, recoverable value, present value and at net realizable value in terms of International Financial Reporting Standards or SA GAAP.

The business game is mainly played on this field. We have to admit that the main players in this field are not accountants. Production, manufacturing, warehousing, transportation, marketing, publicity, sales, after sales service, insurance, customs, taxation, etc are mainly done by other members in the business game team. Accountants are mainly in operation as scorekeepers because of their specialized knowledge and training.

Accountants are, nevertheless, also important players in the variable item game: Valuing variable items incorrectly can even lead to the collapse of the world economic system as evidenced by the latest financial crisis. Accountants are thus important players in being true and valid value custodians: valuing variable items correctly where these values are not determined in the market: see the sub-prime crisis.


Accountants are thus multitaskers in the variable item game too: they are very important players – not in scoring goals by making sales, but, in valuing variable items – the values of which are not determined in the market place - correctly. They keep on faithfully fulfilling their general task as scorekeepers too – during and after the game.

But, they are not just scorekeepers as the accounting professors and their followers claim. As I stated before: they are dead wrong.

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