The article informs that American Institute of Certified Public Accountants began research efforts over thirty years ago. The first studies, for the New York Stock Exchange, led to the Research Bulletins which approached each problem as if it were an isolated area. There was no expressed foundation of postulates upon which to build a coherent structure. In 1959, the Research Bulletins were discontinued and the research Studies authorized. As the bulletins continue "in force with the same degree of authority as before," they exert an influence upon current practice. The Committee on Accounting Procedure defined the operating cycle as "the average time intervening between the acquisition of materials or services entering this process and the final cash realization. The Committee stated their belief that the going concern concept supports departure from a strict one year rule of classification. The purpose of the concept is to relate classification criteria to the operating cycle of the firm. Assets which are directly related to operations are classified on the basis of the length of the cycle.

This article brings into perspective the three major questions involved in allocation of income tax within the financial statements of non-regulated businesses in the U.S. in 1966. The first is the nature of Federal income taxes. The second question is derived from the first, the desirability of allocation. The third question is about what to do with the balance-sheet element resulting from allocation procedures. The author concludes that to match income tax with the related items, the expense and the amount payable will frequently differ.