The accounting world has become shrouded in complexity, largely of its own making. Here’s an uncontroversial statement of its original purpose: ‘To report the results of an entity’s economic transactions in accordance with well-understood and generally accepted accounting principles.’

Here is an equally uncontroversial statement: ‘No enterprise would get off the ground without capital, and accounting’s role is to record its alternative forms, such as liquid assets, stocks of finished products or fixed assets – and whether those running the enterprise prefer to purchase such assets outright or retain flexibility by entering into a lease agreement and paying rent for their use.

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