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Chapter 3 The APB Post ARS #1 and #3
Examine the post-rejection of ARS #1 and #3 tenure of APB Consider second major theory formulation: ASOBAT
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Standard Setting V The APB-Post ARS #1 and 3
Started off with “Golden Opportunity (G.O.)” to develop theory. Possible redemption: G.O. #2
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GO #2:Accounting for Investment Credit
Options? How did the APB react to golden opportunity #2? What consequences followed?
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Questions Why do you think the APB adopted the deferral approach to the IC? If you had been a member of the APB, how would you have felt when the SEC overruled Opinion #2 with ASR #96 in January, 1963?
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Theory III ASOBAT 1966 Profession still theory-less Turn to who?
Comparative advantage?
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ASOBAT What was it to accomplish?
“…the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information.” 3 definitional differences? Approach, Contents, and Core
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ASOBAT Flavor
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ASOBAT 3 Controversy Three criticisms: R. Morrison G. Sorter
R. Sterling
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ASOBAT Critique #1 R. Morrison, the practitioner, Commentary
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ASOBAT Critique #2 Concerns: G. Sorter*
*”An Events Approach to Basic Accounting Theory,” Accounting Review 1/1969.
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ASOBAT Critique #3 Concerns: Sterling*
*”ASOBAT: A Review Article,” Journal of Accounting Research, Spring 1967.
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APB Failing By 1970, Major Problems emerged
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International: Other Approaches to Standard Setting
World-wide Standard Setting Approaches-1. public, 2. private, 3. private as public, and 4. mixed.
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