PERMISSIBLE OPERATIONS OF SCALE

One reason for discussing scales is that certain mathematical applications are permissible only for
different types of scales. The ratio scale allows for all the fundamental arithmetical operations of
addition, subtraction, multiplication and division, and also algebra, analytic geometry, calculus and
statistical methods. A ratio scale remains invariant (fixed) over all transformations when multiplied by
a constant. For example, consider the following:
X'=cX
If X represents all the points on a given scale, and each point is multiplied by a constant c, the
resulting scale X' will also be a ratio scale. The reason is that the structure of the scale is left invariant,
that is:
• the rank order of the points is unchanged
• the ratios of the points are unchanged
• the zero point is unchanged.
This means that if we measured the length of a room and found it to be 400 centimetres and then
converted the 400 centimetres to 4 metres by multiplying by the constant 1/100, we can be assured
that the length of the room is unchanged, even though the number representing length has changed.
This is the same point we make in chapter 6 regarding the conversion of historical cost of, say, $100
000 of equipment under the nominal dollar scale to the purchasing power of the dollar scale by
applying a constant, say, 120/100, to derive $120 000. The $120 000 is still historical cost.
The invariance of a scale permits us to know the extent to which a theory or rule remains basically the
same, even though the scale is expressed in different units, such as from centimetres to metres or from
nominal dollars to constant dollars. An invariant transformation of a ratio scale will leave intact the
same general form of the relationship of the variables. Without invariance, it is possible to find that X
is twice as long as Y when measured in centimetres, but three times as long when measured in metres.
In accounting, the scale for current cost is variant from that of historical cost, because the attributes to
be measured are different. When machine A is measured under historical cost it maybe $90000, but
when measured under current cost it may be $110000. The unit of measure, the dollar, is used in both
cases but the scales are different: they are variant. But changing from the nominal dollar scale to the
purchasing power of the dollar scale for the same attribute (historical cost or current cost) leaves the
structure invariant. With an interval scale, not all arithmetical operations are permissible. Addition
and subtraction can be used with respect to the particular numbers on the scale as well as the intervals.
However, multiplication and division cannot be used with reference to the particular numbers, only to
the intervals. The reasons are due to the conditions of invariance. An interval scale is invariant under
any linear transformation of the form:

X'=cX+b
The transformation of one interval scale for measuring a specific property to another
interval scale for measuring the same property is made by multiplying each point of the first scale X
by a constant c and adding to it a constant b. The reason for b is that there is no absolute zero point on
an interval scale. Par example, to transform from Celsius temperature to Fahrenheit temperature, we
multiply each degree by 9/5 and add 32. The 9/5 is used because the Celsius scale has 100 degrees as
opposed to 180 degrees for Fahrenheit, and 32 is added because that is the freezing point for the latter
scale. The conditions of invariance show that we can multiply and divide with respect to the intervals,
but these arithmetical operations cannot be used for the particular numbers on the scale. To illustrate,
consider the following transformation:
X'=X+ 10

Consider the objects on points 3 and 6 on scale X. Transforming to scale X', we now have 13 and 16.
The ratio of 13 to 16 is not the same as the ratio of 3 to 6 because of the addition of the constant.
Multiplication and division (i.e. ratios) are therefore not permissible for the particular numbers. Thus,
if Robyn receives 90 points on her accounting exam and Maria receives 45 points, we cannot say that
Robyn knows twice as much as Maria regarding the subject matter of the exam. The reason is that
there is no natural zero poinl for the exam for 'no knowledge'. Even if a student receives 0' on the
exam, we cannot say that he or she has no knowledge of the subject matter. In this example, what we
can say is that Robyn passed the exam and Maria failed the exam, but we cannot infer comparatively
the amount of knowledge to the numbers. Likewise, if the quantity variance is $5000 favourable, as
opposed to the previous month's variance of $10 000 favourable, we cannot say that the use of
materials this month is only half as efficient as in the preceding month.
With ordinal scales, none ofthe arithmetical operations can be used. We cannot add, subtract, multiply
or divide the numbers or the intervals on the scale. Ordinal scales, therefore, convey limited
information.