Knowledge that Transforms

Abstract Reviews the book "Measuring and Reporting the 'Replacement' Cost of Oil and Gas Reserves," by Glenn A. Welsch and Edward B. Deakin.

Abstract The article presents a reply to the comments made by authors S. Basu and J.R. Hanna (BH), on the author's article related to interindustry estimation of general price-level impact on financial information. The purpose of the present correspondence is to discuss the essential experimental and conceptual issues which seem to be at the center of the concern indicated by BH, and to add additional data and analysis to that now existing in the literature of general price-level research in accounting. The essence of the criticisms leveled at the author's earlier work is as follows, an "error" was committed in the presentation and analysis of the restated data which was caused by comparing restated and rolled forward with data measured on a basic historical cost basis. An error was committed in the calculation of the standard normal variates, and that the method employed to analyze the data was not the best selection in the circumstances. The issues of deciding the best way to prepare and present data to illustrate the effects of changing a measurement rule in accounting are subtle.

Abstract Reviews the book "Financial Accounting: Principles and Issues," by Michael H. Granof.

Abstract Reviews the book "Working With the Revenue Code 1977," edited by Irvin F. Diamond.

Abstract Reviews the book "Auditing Principles," by Howard F. Stettler.

Abstract ABSTRACT: The exit-price approach to financial statement valuation has been criticized for the lack of a meaningful income statement. In this article, an income statement is designed that provides information about the resource flows which result in income generation. The proposed statement is divided into an operating section and a holding section. The traditional revenue recognition assumption is maintained in the operating section. Expenses are then matched with revenues based on a concept called "instantaneous matching." In the holding section of the statement, gains and losses are based on market price changes of assets held. The income statement uses both replacement costs and exit prices and yet reconciles with exit-price balance sheets. The result is that the strengths of a replacement cost income statement are combined with an exit-price oriented balance sheet.

Abstract Reviews the book "Frontiers of Auditing Research," edited by Barry E. Cushing and Jack L. Krogstad.

Abstract Reviews the book "Modern Management Accounting," by Ronald J. Thacker and Richard L. Smith.

Abstract Reviews the book "Accounting: An Introduction," 2nd ed., by Charles J. Woelfel.

Abstract Reviews the books "Zero-Base Budgeting Comes of Age," by Logan M. Cheek and "Zero-Base Planning and Budgeting: Improved Cost Control and Resource Allocation," by Paul J. Stonich.