Prudent valuation vs confidence accounting

Accounts shouldn't pretend valuations are exact - but how best to fix the problem?


A single number is always easier for humans to understand and to recall than a vector. As a result, we often try to simplify complex concepts by reducing their dimensionality. For example, we talk about the stock market rising or falling by a certain percentage amount when we are really talking about the change in an index that is a weighted average of the prices of many different shares.

Such simplifications are necessary and usually fairly harmless. The more complex underlying reality is

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here:

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: