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The metaphysics of financial performance in financial accounting

Rutherford, Brian A. (2023) The metaphysics of financial performance in financial accounting. Philosophy of Management, 22 (2). pp. 205-226. ISSN 2052-9597. (doi:10.1007/s40926-022-00217-0) (KAR id:101288)


This paper argues that the metaphysics of financial performance in the conceptual framework employed by accounting standard-setters is incoherent: income and expenses cannot, as the framework holds, both be independent elements of financial statements, identified from underlying events, tested for recognition and measured by discrete acts, separately from the identification, testing and measurement of other elements and satisfy the analytical relationship between performance and position embraced by the framework. An alternative conceptualisation is proposed, under which income and expenses are part of a wider system of classifying all changes in assets and liabilities, measured indirectly. This approach improves the metaphysical coherence, and thus the intellectual strength, of the framework project; while it leaves the measurement of financial performance unchanged, by emphasising the importance of classification, it invites further attention to the presentation of financial performance, with the potential for improving the usefulness of disclosures.

Item Type: Article
DOI/Identification number: 10.1007/s40926-022-00217-0
Uncontrolled keywords: Article, Classification, Conceptual framework, Financial performance, Individuation, Pragmatism
Subjects: H Social Sciences > HG Finance
Divisions: Divisions > Kent Business School - Division > Department of Accounting and Finance
Funders: University of Kent (
SWORD Depositor: JISC Publications Router
Depositing User: JISC Publications Router
Date Deposited: 16 May 2023 08:54 UTC
Last Modified: 17 May 2023 09:32 UTC
Resource URI: (The current URI for this page, for reference purposes)

University of Kent Author Information

Rutherford, Brian A..

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