ACCOUNTING POLICY OR ECONOMIC PHILOSOPHY?
The original cost provision for plant accounts, now incorporated in the uniform system of accounts prescribed for most electric utilities, was advanced by certain regulatory authorities as a "requirement of sound accounting practices" and as an "expedient to effective rate regulations." The present program of the Federal Power Commission, as revealed in "original cost" proceedings which followed the initiation of this system of accounts, shows conclusively that this system of accounts, together with the arguments advanced for its adoption, were, to this authority, within the shell of which was concealed an economic philosophy utterly foreign to the American system of private enterprise. Does it not seem that the attempt of this authority to apply this radical economic philosophy to public utilities, as a regulatory policy, may represent the first step in a well-prepared plan to revolutionize the whole American economy and that it may represent the spearhead of an attack on the American system of free enterprise? The distinguishing feature of "original cost" accounting is found in the provisions for the analysis of costs incurred in the acquisition of operating or going concerns, or in the purchase of an earning entity.
- DOI
- 10.2308/tar-7037386
- Volume
- 20 (1)
- Pages
- 24-30
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref