part b

Despite to this matter, Kabir (2005) in his paper claimed that the major limitation under normative accounting theories is disagreements among academicians on the basis assumptions and hypothesized information available to the users. In addition, the studies also indicate the differences of recognition and measurement in valuation which derived from difference implications among the theorists. Apart from that, it is notable that the debating in normative theories eventually works well in particular practices resulting to the improvement in accounting system globally. As the accounting regulators may refer to this basis measurement, the researchers also may review theses theories and assumptions as a literature for a research development in the future. Besides of its simple and understandable accounting approach, it could be suggest that there are no personal bias influences or manipulation by certain parties in their creation of theories.

However, others might views in a different way as some of the researchers believed that the development of measurement in accounting standard associated with Positive Accounting Theories (PAT) develop by Watts and Zimmerman (1978). The studies argued that neither normative nor prescriptive theories can predict how the underlying factor changes in the research. Thus, they begin to develop a theory of how to determine the accounting theories and explaining the role of theories called Positive Accounting Theory. As the normative theories of accounting prescribe on the process of accounting should be taken from logical reasoning, PAT theoretically seek to describe and predict the accounting practice in particular phenomenon.

According to the PAT concept, it suggests that the political process is t...

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... conflict and criticism from the development of theories in accounting until the adoption of fair value measurement has been discussed may not only effect to the IASB, but FASB as well. Some claimed that fair value approach leads to the difficulties in financial institutions practice but, on the other side, people might supported the adoption of fair value approach as a better access of true position in financial reporting, especially during the crisis of historical cost approach. Ultimately, fair value approach still remains for various recognition and measurement in international accounting standard. However, in response to some critical issues, currently the IASB has taken an initiatives to replace the IAS 39 namely IFRS 9. Even though IFRS 9 is still in progress, it is hoped that this new standard of accounting may resolve issues in the IAS 39 effectively.