The principles of accounting measurement and disclosure and its reflection on the financial statements: An evidence from Turkey

The motivation of this study is to show the implications of the accounting measurement and disclosure principles on the financial statements of entities. The study focuses on whether the change in accounting measurement and disclosure principles affects the financial statements. The importance of the study is that it shows the negative and the positive aspects of any measurement principles that will be adopted in the preparation of the financial statements either using the historical cost or the fair value principle. In addition, it reveals the extent to which relevancy, reliability, comprehension, comparability, credibility and transparency are affected by the used and approved methods of measurement. To achieve the purpose of this study, a sample of 106 doctoral and master's students and final year students from the Faculty of Management and Economics, Gaziantep University in Turkey was selected. This sample contributed by answering the questionnaire that was given directly by the researcher to the participants to clearly show the research problem. The independent variable is the accounting measurement and disclosure principle, while the financial statements the dependent variable. The main aim of this research is to answer many questions that concentrate on the core of the impact, relationship and implications between the used measurement methods and the data of the financial statements. Accordingly, a conceptual outline of the study was designed and many hypotheses were produced. In order to discover whether the hypotheses are agreeable or not, they are undergo to statistical tests. The results of the statistical tests showed that the correlations between the dependent variables and the independent variables are very strong. In addition, the measurement based on the fair value principle has a positive and clear effect on the financial statements , in contrast to the historical cost principle, which reflects many negative results due to the lack of relevancy, etc., and due to its negative impact on the financial statements data. The adoption of fair value principle instead of historical cost principle contributes in the creation a realistic vision of the financial position of the entity and the provision of the accurate and high-value information to entities. This information contributes positively in the process of decision making, which will, in turn, depend on the data of the financial statements prepared according to the fair value principle. Keyword: Accounting Measurement, Disclusure, Financial Statements, (Fv) Fair Value, (Hc) Historical Cost