The use of an allowance for repairs to spread total estimated repair cost over the life of the related asset has been criticized on several grounds. A study of maintenance costs also discloses that there are shadings with respect to the significance of amounts as well as the length of time during which the benefits will be derived. The objective must be, however, to match significant costs with revenue in a sound manner. If, for example, the adjustments of tolerances on a piece of precision equipment is significantly costly and is necessarily at the end of each two-year period in the life of the equipment, costs related to adjustments of tolerances should be allocated to the periods receiving the benefit. Presumably when acquired, the equipment was properly adjusted by the manufacturer. A part of the acquisition cost conceptually was related to the initial adjustment. It seems reasonable that this portion of acquisition cost should be spread over the following two years. The cost of readjustment incurred at the end of the second year should be allocated to the next two year period etc.

Reviews the book "Accounting Systems," 3rd ed., by John J.W. Neuner and Ulrich J. Neuner.

Reviews the book "Handbook of Accounting Methods," by J.K. Lasser.

Reviews the book "Business Budgeting and Control," by J. Brooks Heckert and James Willson.

To stimulate economic growth by the encouragement of investment in productive facilities, the 1962 tax law gives a credit against the tax liability of a company. Broadly speaking, the deduction is 7 per cent of qualified investment in new, and to a limited extent used, depreciable property. The 1.3 billion annual tax break has been hailed as a major aid to the U. S. industry in its battle with foreign producers, but it presents some significant accounting problems. The investment credit is not elective. If the business qualifies for the credit, the basis of the property will reduced by the credit which was due. This is true regardless of whether the business claims or does not claim the credit or was unable to use the credit because of operating at a loss. Property qualifies in the year that it is put in service even though depreciation under the taxpayers method of depreciation does not start until the following year. There is no proration required of the credit. For tax purposes all of the investment in facilities and related investment credit is taken into account in the year of initial service even though the property is put into service the last day of the taxable year.

This article highlights the report of the Committee on International Accounting Research of the American Accounting Association. The report is the result of the 1966/67 research effort of the Committee on International Accounting Research of the American Accounting Association. In carrying out its assignment the Committee felt that it would be appropriate to comment on the usefulness of the "standards" and "guidelines" contained in "A Statement of Basic Accounting Theory" as well as to appraise selected international accounting reports in the light of these standards and guidelines. For this purpose the committee decided to study a recent annual report for each of five companies from each of the following countries: Argentina; Japan; The Netherlands; Sweden; and Great Britain. While the companies included in the study collectively do a significant amount of international business, it is felt that the sample was too restricted to justify generally valid observations. The comments in this report are therefore best viewed as tentative conclusions which should be tested by more comprehensive studies before being accepted.

This article explores the business entity concept of the 1964 Concepts and Standards Research Committee of the American Accounting Association and its significance to accounting. The committee's study of the business entity concept has caused it to depart significantly from the concise statement of the concept contained in the 1957 Revision. The committee believes that in referring to concepts underlying the conventions of accounting the use of the term business is inappropriately restrictive. The committee suggests that, in accounting, the term entity concept be used. In accounting the entity with which one is concerned may be defined as an area of economic interest to a particular individual or group. The boundaries of such an economic entity are identifiable by determining the interested individual or group, and by determining the nature of that individual's or that group's interest. An economic entity encompasses the activities, events, and utilization of resources that affect the interest of the individual or group. Simply stated, the committee advocates a user-oriented approach in defining an entity. That is, accounting reports about entities are developed to meet the needs of particular individuals or groups.