Knowledge that Transforms

Financial ratios, Industry average financial ratios, Earnings smoothing

The Institute's Accounting Principles Board has just added a third Opinion to its output for this year. The first Opinion dealt with reporting net income of commercial banks, the second with accounting for convertible debt and debt issued with stock purchase warrants, and the third with computing earnings per share. Although there were some delays in getting each of these Opinions out, as compared to original time schedules, the fact that they were finalized is cause for satisfaction, because each of the opinions faced strong opposition from various groups. This is not new or surprising, for every subject tackled by the Board is controversial and strong opposition may be expected from some quarter for any position taken. While some financiers and business conglomerators complain about what the Board is doing, many observers are commenting favorably about its work. One syndicated columnist recently wrote an article about the APB entitled, They Act as Management's Conscience. In it he said:

John Leslie Livingstone, Accelerated Depreciation, Tax Allocation, and Cyclical Asset Expenditures of Large Manufacturing Companies, Journal of Accounting Research, Vol. 7, No. 2 (Autumn, 1969), pp. 245-256

Depreciation, Time-adjusted Depreciation, Cost allocation, Cost accounting

Accelerated Depreciation, Internal revenue code, Double declining balance depreciation, Sum of years depreciation

Price-level accounting, Price levels, Utility function

Depreciation, Exchange rate, Price-level adjusted accounting, Asset valuation

Asset valuation, Linear Programming, Opportunity value