| Let me first begin by saying that I agree in general with Brian’s proposition that the theory of the firm provides insights into requisite financial reporting systems. I also agree with Mike’s characterization of business models as diverse, subjective, and mostly aspirational and if I may add, essentially vacuous. I disagree with the notion that financial reporting and recognition and measurement principles should be tailored to business models. Rather, I shall make the argument that recognition and measurement principles should be invariant to diverse business models. Indeed, the theory of the firm would suggest universal recognition and measurement principles that apply independently of the business models. The role of business models, I contend, is to facilitate proper quantifications—the required output of applying the universal recognition and measurement principles. |