Abstract
In origin, the profit or loss of any organization was found by comparing the net assets of the owner at the time of commencement of trade with the net assets at the time of ceasing of trade. This is still the legal way of ascertaining ‘profit’, and is used by accountants to ascertain profit or loss where financial records have been accidentally destroyed (e.g. by magnetic disturbance of computer memories) or wilfully destroyed (e.g. by directors anxious to avoid a tax investigation). The method is also extensively used to determine tax assessments where no records, or incomplete records, have been kept.
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© 1990 D.J.A. Alexander
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Alexander, D. (1990). Sanctity of capital. In: Financial Reporting. Springer, Boston, MA. https://doi.org/10.1007/978-1-4899-7118-0_11
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DOI: https://doi.org/10.1007/978-1-4899-7118-0_11
Publisher Name: Springer, Boston, MA
Print ISBN: 978-0-412-35790-9
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