One hundred years ago the Parliament of the Great Britain enacted the Companies Act of 1862. This Act was to be, for nearly half a century, the main statute for the regulation of British companies; and in the Act's provisions, or in what was lacking in those provisions, the strong individualism and laissez-faire spirit of latter 19th century Great Britain were manifest. For the Act contained no mandatory provisions with respect to accounts or audit: these were matters of private contract, to be left to the stockholders. Major reforms related to company Act took place in Great Britain. In the year 1962, Jenkins Report was presented. Much of the Report is concerned with the general law. Generally, the accounting recommendations of this Report can be regarded as an attempt to add marginal improvements to existing legislation, rather than as a plan of radical change. Many of the improvements will be valuable. The general impression that the Report gives is of a Committee that, as a whole, possessed a high technical competence in law and accounting, but a substantially lower one in economic policy

The problem of properly accounting for discount is of increasing importance in the finance field. Historically, it has been of major concern to sales finance companies. Consumer finance companies have not had to deal with it to any significant degree because their loans traditionally have been on a "per cent per month of the unpaid balance" method with interest income computed on each loan account each month. In an effort to reduce costs, however, the consumer finance companies have discovered the economies of "precomputation" of charges, i.e., of including their charges in the face of the notes their customers sign. These companies now share the problem of taking into income the discount at which they purchase their installment paper. The switch to "precomp" (discounted notes) has not been universal. The principal braking action on the movement has been the detailed and sometimes archaic and straight-jacketing state laws and regulations under which these companies operate. Many of these laws have been based on the supposition that the interests of those who utilize the services of the consumer finance companies are better "protected" if the exact number of dollars and cents charged for interest is spotlighted each month

Of the two methods of liberalized depreciation specifically authorized for income-tax purposes by the Internal Revenue Code of 1954, the declining balance method has apparently been the overwhelming choice of the many utility companies in the United States, which have adopted an accelerated method of depreciation. The reason for the general preference for this method over the sum of the years-digits method cannot be determined precisely, but it is believed that the explanation lies in the widely publicized provision, which allows the company adopting the declining balance method to change to the straight-line method at any time without prior permission of the Revenue Commissioner. When the declining balance method of depreciation is used with groups of property, as is the typical case in public utility accounting, there is no great advantage to be gained by changing to straight-line depreciation. Studies of the behavior of property groups indicate that there is little basis for assuming that a property group will live to average life and be abruptly retired. The probability of retirements from a group of property coinciding with such a predicted retirement pattern is extremely small. There is no provision in the Internal Revenue Code of 1954 or in the regulations, which permits shifting from the declining balance method of depreciation to an amortization scheme