Pragmatic Accounting

There is no generally accepted theory of accounting. There are a number of accounting theories (though a systematic attempt has been made by Financial Accounting Board (FASB) of USA and IASC and other to formulate a comprehensive theory of accounting). The definition of Accounting Theory given by Hendriksen as “a set of broad principles that (i) provide a general frame of reference by which accounting practice can be evaluated, and (ii) guide the development of new practices and procedures” lead us to perceive accounting theory as a basis of explanation and prediction. The primary objective of accounting theory, as it follows from this definition, is to provide a coherent set of logically derived principles that serve as a frame of reference for explanation/prediction of accounting events and behavior.
Classification of Accounting Theories
There are several ways of classifying accounting theories. They may be classified, for example, according to time e.g. steward accounting, decision usefulness accounting, and accountability or societal responsibility accounting. Other ways of classifying theories can be (i) Inductive versus deductive, and (ii) normative versus positive.
Glautier and Underdown are of the view that the roots of accounting theory are decision theory, measurement theory, and informational theory.
Hendirksen says that “a useful frame of reference is to classify theories according to prediction levels” there are, according to him, three main levels of theory. The levels are as follows: 1) Structural or syntactical theories. 2) Interpretational or semantical theories. 3) Behavioural or pragmatic theories.

Behavioral or pragmatic theories:
These theories emphasize the behavioural or decision-oriented effects of accounting reports and statements.
It has been noted that accounting is now regarded as a process of measurement and reporting information to the users- internal and external. Since 1945 onwards it is being realized that accounting is