Understanding the Concept of Profit as an Economic Information Instrument: Disclosure of Semantic Meanings

Abstract

Accounting information presented in financial statements is likened to a set of symbols. These symbols are expected to represent certain realities, which are called semantic meanings. One of the symbols presented in the financial statements is profit. As a communication medium, the presentation of profits must be interpreted exactly the same

as the intended meaning, so that accounting information becomes unbiased. The purpose of this study is to reveal the understanding of the concept of profit based on semantic meaning from the point of view of the accounting accountant. This study uses

an interpretive qualitative approach. Data were obtained from structured interviews

with informants, namely educator accountants in Indonesia with “mainstream and

anti-mainstream” schools of thought. The results of the study reveal that the tendency

has been a shift in thinking from educator accountants that originated from idealism

to being pragmatic. The meaning of profit at the semantic level is not only materially

interpreted. Although profit is used as an indicator of the success of the company, profit is interpreted as a representation of changes in the company’s economic reality. That,

the meaning of profit reflects the company’s efforts to improve its economic capacity

and its usefulness to the wider community. In other words, that profit is an economic

information instrument that is expected to provide value-added to its users.