ABSTRACT: The aim of this paper is to contribute at the debate about the Decree 139/2015 and the new accounting principles issued on December 22, 2016 by the Italian Body of Accounting, OIC. The discussion is on different possible valuation methods in financial reporting and consequently on the meaning of extreme synthesis information from financial statements, particularly the ‘periodic income’ and ‘balance sheet capital’. On one side the paper stresses the traditional principle of historical cost and the ‘prudence principle’, rule of caution, with its configuration of “realized income”, on the other side the current value and present value with their configuration of “earned income”; it is in other words the distinction between ‘conservative accounting’ based on traditional accounting valuations and ‘unbiased accounting’ founded on economic valuations. The motto of ‘different valuation principles for different purposes’ still rings loud and clear when it comes the call for genuinely purpose-oriented accounting systems. On one hand, the need for simple and conservative principles, such as ‘lower of cost or market values’, ‘realization at point of sale’, ‘nominal capital maintenance’, ‘income smoothing’ and so on. On the other hand, the longing for more basic assumptions and theorems, better justifiable from an economic and managerial point of view, such as present values or replacement values or exit values, real financial or even physical capital maintenance, comprehensive income and clean surplus statement and so forth. The paper investigates extensively with emphasis the ‘moment of values formation’ and ‘economic production’ because it appears fruitful and contributive in replying to the above topics and their debate.
KEYWORDS: conservative accounting, unbiased accounting, economic valuations, value production, value formation.
