Knowledge that Transforms

Reviews the book "Law and Labor Relations. A Study of the Industrial Disputes Investigation Act of Canada," by B.M. Selekman.

The article focuses on defining the concept of goodwill. Initially goodwill was defined as nothing more than the probability of old customers returning to the old place. In one instance, goodwill has been defined as an intangible property which, in the nature of things, can have no existence apart from a business of some sort that has been established and carried on at a particular place. Goodwill is the favor which the management of a business wins from the public and the probability that all customers will continue their patronage. It is the general public patronage and encouragement which a business receives from its customers on account of its local position; that is the subject of value and price and of bargain and sale, though intangible. In this definition, the patronage concept is dominant, although its dependence upon location is still mentioned. In general, it may be stated that the emphasis upon the local aspect of goodwill has declined gradually, although there has been considerable overlapping of views in point of time.

Reviews the book "How to Evaluate Financial Statements," by Alexander Wall.

Reviews the book "C.P.A. Law Questions and Answers," by John C. Teevan.

The article presents the author's comments on having a professional college for accountancy. The author says that the profession throughout the U.S. has not yet made an adequate test of the existing programs of accounting instruction or a thorough trial of graduates of colleges of commerce with an accounting major. Too often in taking commerce graduates into the staff, little or no attention is paid to scholarship records as a clue to aptitude and the ability to lean. Occasionally personality and college activities are allowed to out-weigh the evidence of a thorough foundation in collateral subjects. Practitioners could provide an immediate and powerful stimulus to better educational preparation for accountancy if they would pledge themselves for a period of years to absorb the scholastic upper fifty per cent of the accountancy graduates of the colleges of commerce having a satisfactory accounting program. The article further asserts that the profession is hardly ready for separate schools of accountancy with a high degree of specialization because the literature and teaching materials are still inadequate to support a three-year program in accountancy alone. Thus, either collateral or related subject matter, such as economics, finance, law, and business administration, should be added to the work in accountancy in desirable amounts.

In barter for re-trade, expected profit is a judgment regarding relative subsequent exchangeability of the new thing possessed in comparison with other, as yet, un-possessed desirable things. The test of this pre-judgment comes when the anticipated re-exchange is accomplished. If, subsequent to the first barter-exchange, no third person finds a prospective utility in the goods held for re-exchange, there is no second exchange and no accomplished profit for the trader; also if after a second barter exchange, the goods then newly received should prove not to have the expected utility, there can be no accomplished profit. Valuation is a part of the process of exercising sound judgment in consuming or trading, and forms the basis for all production and merchandising operations. And the ability to make sound judgments regarding consumptive wants and uses, and of trade opportunities exists quite independently of records as such. Reality of profit should not he read into a situation too soon or upon inadequate evidence. This is the basis of the so-called realization principle. When an objective test has verified a personal hope, conviction of reality may safely follow but not before. Anticipated profits are mere opinions and therefore subject to individual bias and mistaken judgment. Realized profits on the other hand have met an objective test, under conditions by which the utility of the goods has been further attested by the independent judgment of a subsequent receiver in exchange. But even such realization may prove to be an incomplete test of reality because today's gains may be consumed by tomorrow's losses if the goods last received prove useless.

Reviews the book "Cases on Business Law," by Dwight A. Pomeroy.

The article discusses various aspects of professional accountancy. The discipline means the vocation of accountancy, whether practiced in the private or the public field. Accountancy is said to take pride in calling itself a profession. The specific problem to which this article addresses itself is the organization of a curriculum or course of training for professional accountancy. It should be pointed out that in the first place, the building of a curriculum is essentially a scholastic undertaking, and in the second place, that a large part of the work of a professional man or of a business executive is of necessity pedagogical in character, in that he is always faced with the task of training staff men to a proper understanding and performance of their tasks. Thus, the practitioner, as well as the pedagog, should be interested in the development of curricula and courses of training. The article presents a curriculum to address different activities of the profession. It also says that in building a curriculum, some attention must always be given to the lines of probable future development of the profession.

With the development of large-scale activity, elaborate technical processes, and the corporate form of organization the business enterprise has become in many cases a highly complex economic institution, and the valuation of the facilities and conditions of production in terms of the enterprise in its entirety is accordingly a bafflingly difficult problem, a problem which comprehends substantially all phases of accounting analysis and all types of value determinations. The business enterprise, it is scarcely going too far to say, is truly an organic entity, a something capable of being contemplated for its own sake and valued in its own right. The enterprise in other words, and as has often been pointed out in utility valuation cases, is an bite rated, functioning, continuing establishment, and not a mere bundle or aggregation of separate elements or parts. And the value of the enterprise, it follows, may be more or less than the sum of the values of the constituent factors, considered singly, in apparent violation of one of the more obvious mathematical axioms. Further, in view of the extent now-a-days to which both small and large blocks of securities evidencing enterprise ownership are transferred from one party to another, including the practices of acquiring whole businesses through merger and consolidation, to say nothing of the matter of proper periodic measurement in the interest of the various equities, it appears that there is some excuse for urging that more systematic and discriminating attention be given to the question of enterprise valuation as opposed to other forms of appraisals.

Reviews the book "Economic Thought and Its Institutional Background," by H.W. Peck.