Price variation accounting, Price-level adjusted accounting, Net income, Time value of money

can take all the Sj and try to minimize the variance of vj via factor analysis. We could then find S and also see which Sj was most closely correlated with S. Unfortunately this technique requires that the Sj does not have common measurement error. Since none of the Sj are completely independent of all others (some common source of data is used), common error can creep in. In principle, if one data sourcebut not another -gave answers unacceptable in terms of the a priori considerations dictated by economics, we could eliminate the series. In the present instance, the only possibility would be the significance of NTW1 in the Sggc equations but not in the SOBi}B forms. The differences in cyclical behavior between series are disturbing. But none of the responses violate all saving theories especially since the more recent theoretical innovations, such as permanent income and the ratchet effect define saving to include purchases net of depreciation. Finally the relative quality of the data could be judged by a detailed examination of the primary data sources and subsequent manipulations. This cannot be done now since the last time the SEC and the OBE published detailed descriptions of their sources and manipulations was more than a decade ago and those descriptions in [3, 5] are out of date. Besides, the number of primary data sources used is quite large and diverse. Only a group of individuals familiar with the separate parts could hope to do a competent study. The conclusion, thus, is quite pessimistic. For the saving function, one of the most basic elements of macro-economics, the dynamic and cyclical characterization depends upon our choice of measurement of a given concept and we do not know which measurement is correct.

Reviews the book "Management Information: A Quantitative Accent," by Thomas H. Williams and Charles H. Griffin.

The article focuses on the cash take-overs and accounting valuations. In the past decade the annual number of cash take-over bids has increased over five hundred per cent, and the rate of increase is accelerating. A take-over bid is generally defined as a bid to purchase some or all of a corporation's stock made by an outsider. It may be an offer to exchange stock for stock or it may be an offer to pay cash for stock. The bidder that offers stock for stock loses the important advantage of surprise, since the issuing shares must be registered with the Securities and Exchange Commission in advance. The disclosure requirements which accompany the registration are complex and may be difficult to execute without access to the offeree's records. Because of the element of surprise, the cash tender is generally used when the bidder takes a position adverse to incumbent management. The atmosphere of secrecy in which these bids are launched has left many legislators, financiers and academicians uncertain as to how and why they occur.

The article focuses on the problems of methodology in accounting theory and principle. If a general methodology in accounting could be agreed upon, theories developed within this framework would stand a better chance of gaining widespread approval. As it is now, both the ends and the means are constantly in dispute. In accounting, there has been a long-standing belief that accounting is an art which does not lend itself to formalization. This attitude is being challenged increasingly. The effort towards formalization must face the issue of improving methodology, otherwise researchers in the field may be working at cross-purposes. Here the author discusses the difficulties which arise when accounting theory is developed without sufficient attention to the conceptual framework, and shows how theory formulation in accounting may progress by adherence to a more formal general methodology. He remarks that lack of methodology in accounting theory in the past has resulted in poor definition of terms.