The difference between the physical capital concept and the financial capital concept is that holding gains are included in profit under the physical capital concept.

Question

Quizplus · Accepted Answer

Under the physical capital concept, holding gains are not included in profit; profit is calculated based on the physical productive capacity of the entity. Holding gains are considered under the financial capital concept, where profit includes both the operating income and the gains or losses from changes in the prices of assets.

The Difference Between the Physical Capital Concept and the Financial