One of the issues that adds greatly to the complexity of accounting is the concept known as “unit of account.” The question is whether to make accounting decisions item by item or to make those decisions based upon some grouping of items.
We have come up with many different answers to the unit of account issue, each seemingly logical to the situation it addresses. Unfortunately, the result of all these individually logical answers is somewhat baffling to a lot of accountants and, much like the measurement attribute issue I wrote about earlier this year, we don’t have any guiding principles for how to select the unit of account, meaning that each time we address the issue, we’re largely starting from scratch.
