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Chapter 3 The APB Post ARS #1 and #3

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. 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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Chapter 3 The APB Post ARS #1 and #3

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  1. Chapter 3The APB Post ARS #1 and #3 • Examine the post-rejection of ARS #1 and #3 tenure of APB • Consider second major theory formulation: ASOBAT

  2. 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

  3. GO #2:Accounting for Investment Credit • Options? • How did the APB react to golden opportunity #2? • What consequences followed?

  4. 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?

  5. Theory IIIASOBAT 1966 • Profession still theory-less • Turn to who? • Comparative advantage?

  6. 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

  7. ASOBAT • Flavor

  8. ASOBAT 3 Controversy • Three criticisms: • R. Morrison • G. Sorter • R. Sterling

  9. ASOBAT Critique #1 • R. Morrison, the practitioner, Commentary

  10. ASOBAT Critique #2 • Concerns: G. Sorter* • *”An Events Approach to Basic Accounting Theory,” Accounting Review 1/1969.

  11. ASOBAT Critique #3 • Concerns: Sterling* • *”ASOBAT: A Review Article,” Journal of Accounting Research, Spring 1967.

  12. APB Failing • By 1970, Major Problems emerged

  13. 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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