Comparison between accounting profit and economic profit and its effect on optimal point of production

Abstract

Profit is one of the main data indicators to assess economic firm that can be regarded as a proper indicator for decision-making. In spite of all various concepts that have been submitted for profit concepts, it seems these concepts are not acceptable by economists and accountants. This research investigates submitted concepts and definitions that are relatively comprehensive and accepted in two fields of economics and accounting; moreover, analyzing impacts of each definition is accepted. Discrepancy in economists and accountants’ view about cost leads to a difference between accounting profit and economic profit. Thus, opportunity cost is not deniable in this role. Moreover, the accountants use straight line or exponential method for calculating depreciation, whereas the economists utilize a method based on profit. This research has tried to present an acceptable concept for profit using the conducted studies and submitted theoretical basics.