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Accounting Horizons, SEPTEMBER 01,1990

Section: COMMENTARY

     ACCOUNTING STANDARDS: THEIR ECONOMIC AND SOCIAL
                                   CONSEQUENCES

What weight, if any, should the FASB give to the potential consequences--economic, social, or political--of its actions? This
question arises whenever the FASB considers changing accounting practice.

Among those involved and interested in the standard setting process--preparers, users, auditors, and others--there is
widespread agreement about three points. The first is that standards of financial accounting and reporting are needed, as is
some mechanism for setting these standards. The FASB is the private sector group presently charged with that
responsibility. The second is that changing accounting standards will have consequential effects of some sort. Indeed, the
very process of changing accounting standards stems from the belief that financial information prepared in accordance with
these standards can make a difference in the decisions reached by those using the information. Third, most accept the
notion that cost/benefit considerations should enter into setting accounting standards. Changes should be made only when
expected benefits exceed anticipated costs.

Beyond these three points, however, there is little agreement to be found. Accounting proposals typically encounter a
diversity of response both within and among constituent groups--concerning both what the economic consequences of a
proposal will be and how these consequences should be factored into the proposal finally adopted.
                                     COSTS AND BENEFITS

Among the consequences of changing accounting standards are economic benefits and economic costs. The FASB must
constantly be aware of both. This is because one of the precepts that the FASB follows in conducting its activities is to
promulgate standards only when the expected benefits exceed perceived costs.

Fully applying this precept implies, at least notionally, the ability to identify all benefits and costs and to put a dollar value on
them. Additionally, dollar benefits and costs would be identified in terms of what segments of society would be affected by
them. In this way, judgments on standards could be made in light of knowledge about both the aggregate societal cost or
benefit of adopting the standards and about the manner in which the costs and benefits would be shared--the wealth
distributional effects.

While notionally desirable, the ability to specify and quantify costs and benefits fully does not exist. In an operational sense,
the Board cannot make cost/benefit determinations with any degree of precision. This is because both costs and benefits are
very difficult to identify and even more difficult to measure.

The FASB has stated that the principal objective or purpose of external general purpose financial reports is to provide
information that is useful to present and prospective investors and creditors and other users in making rational investment,
credit, and similar decisions. In this view, the benefits of a changed accounting standard result from the increased decision
usefulness of the information produced. Decision usefulness is from the primary perspective of present and prospective
investors and creditors. Consistent with this view, economic benefits and costs can be assessed from two principal
perspectives., One is that of the preparer--the enterprise responsible for issuing the financial statements. The other is that of
the users of the information contained in the financial reports present and prospective investors and creditors.
                                    OUT-OF-POCKET COSTS

The most apparent and most readily identifiable costs of a required accounting change are of an out-of-pocket variety.
They initially impact the issuers of financial statements and include:

• costs of collecting, processing and understanding information required by the new standard;

• costs of audit; and

• costs of disseminating information to those who must receive it.

• Users also incur costs when standards are changed. These include:

• costs of analyzing, understanding, and interpreting new information; and

costs of processing excessive information and of rejecting information that is redundant--the diagnosis of redundancy is not
without cost.

In addition, out-of-pocket costs are incurred by a number of parties in developing a changed standard. All of those
participating in the standard setting process in researching, developing, debating and promulgating new standards and in
commenting on proposed standards incur out-of-pocket costs.
                                   OTHER ECONOMIC COSTS

From a preparer perspective, costs attending a new standard may include more than just identifiable out-of-pocket costs.
Other economic costs may result. Important among them may be increases in the cost or decreases in the availability of
capital. Information contained in external financial reports is presumably used by investors and creditors in making
investment and lending decisions. Accordingly, changed reporting methods can lead to changed investor and creditor
decisions, affecting corporate capital cost and availability.

For this reason, when a new standard is proposed, particularly when it would increase recorded expenses and recorded
liabilities, or would increase the volatility of reported earnings, vigorous opposition to the proposal is often expressed by
affected enterprises fearing an adverse impact on capital cost and availability. Many such comments have been made in
connection with the current FASB proposal to require accruing the cost of other postretirement benefits. Similar comments
were heard when the FASB was considering a proposal to require earlier accounting recognition by utilities of the cost of
disallowances by public utility regulators and another proposal to require deferred recognition of loan fee income by savings
and loan associations.

Another type of economic cost results from ways in which management may respond to a modified external reporting
standard. A concern often arises when a standard designed to serve external uses is deemed by management to be
inappropriate for measuring internal performance. This can mean that a required standard will have a result which is
dysfunctional in terms of management's objectives. If an accounting practice designed for external reporting is adopted for
internal purposes, the business may be run on a measurement system not designed to further management objectives or long
term corporate profitability. If, on the other hand, separate measurement systems are used for internal and external
reporting, the effect can be disorienting. Means must be designed to reconcile the two measures. At a minimum, this is
costly.

A similar economic cost may arise if there are cases where accounting standards cause management to behave in
uneconomic ways simply to achieve more stability or short run improvement in reported results, or the appearance of
greater financial strength. Examples frequently mentioned are uneconomic hedges in foreign exchange markets solely to
reduce the volatility of reported earnings, off-balance sheet financing transactions where a more expensive financing
alternative is chosen because it does not have to be reported as a liability, and decisions regarding the level of research
costs to be incurred which are based on the desire to report a particular earnings figure rather than on the long run economic
benefit to a firm.

Another potential economic cost to financial statement preparers arises from adverse competitive effects resulting from
required additional disclosures. This has been most frequently cited in relation to business segment disclosures, but it has
broader implications as well.
                                     ECONOMIC BENEFITS

Since external financial reports are principally intended for use by present and prospective investors and creditors, the
primary benefits of changing accounting standards stem from the enhanced utility of the resulting information to serve these
users. While benefits may be qualitatively described in this fashion, identifying and measuring these benefits is a daunting
task.

Economic benefits resulting from accounting changes are very rarely, if ever, of a measurable, out-of-pocket variety.
Accounting standards are essential to the efficient functioning of the economy because decisions about allocating
capital--the capital markets-- depend heavily on credible, concise, understandable and widely disclosed financial
information. But the benefits resulting from improved standards are difficult to trace. They are of a behavioral, rather than
an out-ofpocket, type. Their incidence is diffuse and they accrue broadly to users and preparers of external financial
reports. They include:

• improved credibility of financial reports in general resulting in public confidence in financial markets and more efficient
allocation of capital resources;

• increased credibility of the individual entity's external financial statements, with resulting improved accessibility to capital
markets, possibly at lower capital costs;

• the increased utility the user gains from improved accounting information, including the ability to make better selections
from among various investment options; and

• a spur to management efficiency as a result of accountability to shareholders, lenders and others who can make more
informed evaluations.

So it is that economic benefits are characterized as serving purposes such as fairness, comparability, the public interest, and
other purposes difficult to identify in particular and even more difficult to try to quantify. While diffuse and hard to identify
and quantify, these qualities occupy an important place among the characteristics of a competitive economy with free capital
markets.
                                      OTHER ECONOMIC
                                       CONSEQUENCES

Economic costs and benefits can be assessed from the perspectives of statement preparers and of statement users. But it is
often argued that this focus is too narrow. It is argued that economic, social, and political consequences beyond those
identifiable from a preparer/user perspective often result and deserve assessment in the standard setting process. In a similar
vein, arguments are advanced that public policy considerations, such as fostering domestic economic growth and stability or
promoting the competitiveness of the U.S. economy in the global arena, should be factored into standard setting decisions.

At least three factors give rise to these additional concerns about economic and social consequences. First, some
consequences represent the aggregate derivative economic or societal impact of actions directly taken by preparers in
response to changed accounting standards. Thus, for example, it has been argued that a required change from a cash to an
accrual basis in accounting for postretirement health care costs will cause enterprises to curtail their retiree health care plans
so as to avoid higher recorded expenses and liabilities. Aggregate employer actions in this direction, it is argued, would have
adverse economic and societal consequences. Many employees would find themselves without adequate health care
coverage, perhaps forcing governmental action to compensate in some fashion. As another example, in 1976 and 1977,
when the FASB was considering new accounting standards for oil and gas producing activities, a number of companies
opined that they would cut back their exploration programs--in some cases by up to 50 percent--if the companies were
forced to change from the full cost to the successful efforts method of accounting. This, it was argued, would be an
unacceptable national economic and social result, coming as it would at a time of increasing U.S. dependence on imported
energy sources. One might question the wisdom of curtailing exploration expenditures because underlying cash flows and
economics would be unaffected by the accounting method employed. Nevertheless, it was argued strenuously that some
firms attached such importance to the pattern and level of reported earnings that the firms would program their activities to
avoid adverse effects on reported earnings.

Assessing these derivative kinds of consequences is very difficult, calling for initially predicting the nature and extent of
enterprise behavioral changes in response to changed methods of reporting financial results. Subsequent judgments would
then be required of the macroeconomic impact of this modified enterprise behavior.

A second factor giving rise to economic consequence concerns is that the information contained in financial statements is
used by a wide variety of parties in addition to present and prospective investors and creditors and for a wide variety of
purposes beyond just making investment and lending decisions. Data in external financial statements are widely used to
define contracting relationships between the enterprise and other parties. For example, many profit sharing and other
compensation arrangements are based on profits as determined for financial reporting purposes. Debt covenants, working
capital maintenance agreements, and similar arrangements with capital suppliers often make reference to information as
prepared for financial statement purposes. Changing accounting standards can change these contractual relationships in
unanticipated ways, either frustrating the initial intent of the contracting parties or necessitating subsequent changes in
contract terms.

Financial statement data are often used by regulatory bodies in the discharge of regulatory objectives. In such instances,
changing accounting standards will have an economic consequence--it will change regulatory relationships. Concerns are
frequently heard that a proposed accounting change will have an effect that is perceived as unfavorable by either the
regulator or the regulated enterprise. Thus, for example, financial institution capital requirements may be based on GAAP
accounting information. A required accounting change, causing a reduction is reported capital, may place certain
enterprises in violation of regulatory capital requirements.

Cost reimbursements from governmental bodies may be based on data as compiled for financial reporting purposes. And in
some instances, taxes may be assessed on income as measured for external financial reporting purposes. In such cases,
financial reporting changes can have direct cash flow consequences.

Financial statements are used by many parties, including customers, employees, and the public at large, to form opinions
about enterprise financial health and performance Thus, customers may use financial statement data to assess the financial
stability of their sources of supply. In formulating wage demands, organized employees may use financial statements to
assess employer ability to pay. And the general public may form opinions about companies and industries based on
information in published financial reports. For example, public opinion favoring increased price regulation or increased
taxation can arise when increasing health care costs are juxtaposed against seemingly high pharmaceutical company
earnings, or when, as happened in the decade of the 1970s, dramatic increases in oil industry profits were reported in a
period of energy shortage.

A third source of economic consequence concerns stems from the fact that financial accounting standards are not
consistent among countries and that companies increasingly compete in a global market. This gives rise to concerns about
the impact of accounting standards on U.S. competitiveness, either when changes in U.S. accounting standards are
proposed or when U.S. enterprises are perceived to have a competitive disadvantage stemming from financial reporting
differences among countries. Thus, it has been argued that requiring U.S. enterprises to record post retirement health care
costs on an accrual rather than a cash basis would have a negative impact on U.S. competitiveness. This is because non
U.S. enterprises, not having to apply U.S. accounting standards, would not be burdened by the increased reported
expenses attending the accounting change. It is further argued that non U.S. countries typically have national health care
coverage. Enterprises in these countries bear the costs associated with post retirement health care benefits through taxation
rather than through individually established company health care plans. Paying the costs through taxes results in a charge
more akin to a pay-as-you-go cost rather than an accrual cost. In either case, U.S. enterprises would record higher
expenses than would their competitors overseas. This, it is argued, would be adverse to U.S. competitiveness.

As another example, it is sometimes argued that existing U.S. standards concerning accounting for goodwill, requiring
initial balance sheet recognition of purchased goodwill and its subsequent amortization to earnings, penalizes U.S.
enterprises in making acquisitions. Foreign companies, not subject to U.S. accounting standards, are not required to
amortize goodwill and thus avoid a future penalty to reported earnings. This difference, it is claimed, gives foreign companies
a relative advantage in making acquisitions.
                                     IDENTIFICATION AND
                                        MEASUREMENT

However desirable it may be, it seems practically impossible even to identify, let alone measure, all of the economic
consequences of an accounting change. Much research has been directed to identifying and measuring the consequences of
particular accounting standards on an ex post basis. These studies have proven interesting and suggestive, but by no means
definitive.

A complete and precise ex post assessment of the consequences of accounting changes is virtually impossible. Even more
difficult is the ex ante identification of these consequences. In response to proposed changes, the FASB often receives
expressions of concern about potential adverse consequences. These expressions of concern, reflecting apprehension about
the unknown and perhaps unknowable, often assume Doomsday proportions. The only thing certain is that actual
consequences are virtually never as dire or drastic as at least some of the anticipated concerns would suggest.

Reasons for the inability to identify and measure consequences in any precise sense include the fact that considerations deal
with an uncertain future in a complex world where few economic predictions can be made with assurance. The inability also
stems from the fact that some consequences are difficult to measure on a strictly economic scale. Some consequences are of
a political, social, or moral variety--impossible to measure on a one dimensional economic scale. Thus, even if the wealth
distribution effects of an accounting change were known, determining whether these effects are desirable or not requires
judgment. This judgment can be characterized more as political, or social, or moral, rather than as exclusively economic.

Of course, the inability fully to describe and quantify potential consequences of a proposed standard does not necessarily
argue that consequences should tee ignored. The question is how consequence considerations should be factored into the
standard setting process.
                                   FASB CONSIDERATION OF
                                       CONSEQUENCES

How much weight the FASB should accord consequence considerations is a question with no clear answer. At one extreme
is the possibility that consequences should dominate the Board's conclusions. At the other end of the spectrum is the view
that conceptual and technical accounting considerations alone should drive accounting standard decisions--with no weight
accorded economic consequences. Between these extremes lies a wide range of possible conclusions.

A number of factors argue against the position that only consequences should matter in setting accounting standards. In the
first place, the difficulty of determining consequences has already been discussed. Not only would the ability to forecast
future behavior be required, but also the conversion into a single dimension of political, economic, social and moral
objectives that cannot meaningfully be so transformed. Persons with this ability simply do not exist. Accordingly, standard
setters would base their decisions on supposed consequences and seek those accounting solutions most likely to promote
popular social, political, or economic goals. Such a process would result in an eclectic and inconsistent collection of
accounting standards and practices. New rules would be developed to foster changing political, social, or economic goals.
Old rules, set when different needs or priorities were predominant, would become counter productive and would require
modification. Accounting standards and practices would be in a state of continual change in response to the shifting political
breezes.

Such a situation would call the credibility of financial statements into serious question. Institutionally, there would clearly be
no need for the present standard setting structure. The FASB, with members selected because of their interest and expertise
in financial reporting, has no unique ability or power to make economic, political, or social judgments concerning the
distribution of wealth. If accounting decisions were to be made based on their popularity, or based on the way they
promote whatever economic, political, or social goals are currently popular, the FASB would be redundant. Such decisions
are political. Politicians can make political decisions better than can accountants.

At the other end of the spectrum is the position that economic consequence considerations should play no part in deciding
upon accounting standards. Conceptual and technical accounting considerations alone would determine answers to
accounting questions. A comprehensive conceptual framework would initially be developed setting forth agreed financial
reporting objectives and the criteria to be followed in attaining those objectives. Accounting questions would be resolved
by adopting that solution that best meets the specified objectives and criteria.

Experience suggests that such an approach, relying exclusively on agreed concepts and logic to produce accounting
standards, will not prove successful. The Board's experience in working on its conceptual framework project suggests
some of the problems.

Extensive efforts to develop an agreed conceptual framework for financial accounting and reporting began anew in 1973
when the FASB was formed after prior efforts by the Accounting Principles Board had proved unsuccessful. Work
extended through 1985 and resulted in six Statements of Financial Accounting Concepts.

These Concept Statements, by establishing parameters within which accounting issues can be addressed, have been helpful
in standard setting. But, as developed to date, the conceptual framework deals more with questions to ask than with
ultimate solutions. The conceptual framework is not sufficiently definitive to serve as a set of formulas from which solutions
to particular accounting problems can readily be derived.

As a consequence, resolving accounting questions is rarely a process of searching for a single correct answer--one which
has a unique claim on truth. Accounting is utilitarian in nature. It is an inexact social science in which absolutely right answers
are extremely rare.

There are no easy, or demonstrably correct and universally applicable, answers to most of the questions that the Board
addresses. This is in part because most problems amenable to clear cut solutions acceptable to all never reach the Board.
Matters that the Board is asked to deal with are typically those on which reasonable and informed people have different
views. It is not surprising then that among seven Board members, each with his own background and view of the world,
there are differences of opinion. Among other matters, these differences of opinion relate to what information is decision
useful, what accounting changes will be cost beneficial, what the behavioral impacts of an accounting change will be, and
what accounting changes are needed to accommodate to a changing economic environment. These differences of opinion
are inevitably reflected in Board member judgments about particular accounting questions. Final accounting standards
reflect the culmination of a process, not of discovery of truth, but of discussion, deliberation and agreement among Board
members. Final standards reflect a consensus of essentially subjective judgments among at least a majority of seven Board
members. Inevitably, these individual subjective judgments reflect the full background of each Board member--not just
technical accounting considerations. The FASB's cost/benefit precept explicitly requires that decisions on accounting
standards be based on more than exclusive reliance on conceptual and technical accounting considerations. There is
widespread agreement about the appropriateness of this overall cost/benefit constraint. Because accounting is a utilitarian
subject whose benefits are described best in terms of the usefulness of the resulting information, it seems reasonable to
demand that the perceived increased informational utility resulting from a change at least offset the costs of making the
change. Adoption of an accounting standard for the exclusive reason of conceptual or logical consistency when the
standard is clearly not cost beneficial would be without economic purpose.

Another reason for not relying exclusively on conceptual and technical accounting considerations relates to the need for
general acceptability of accounting standards. The FASB was created to be an instrument of accounting change. But, in
any given circumstance, limits exist concerning the acceptable amount, direction, and pace of change. The Board must
weigh the identified need for accounting change against the need for a degree of stability in financial reporting.

In an immediate sense, FASB standards derive their authority from the fact that both the SEC and the AICPA consider
FASB standards as authoritative for the purpose of preparing financial statements in accordance with generally accepted
accounting principles. This authority doubtless accounts for the immediate adoption of FASB standards. But, in a broader
sense and on a longer term basis, the authority of FASB statements rests with their being viewed by all segments of a
diverse constituency as being useful, cost beneficial, and fairly established. It is in furtherance of this objective that the Board
has established its elaborate due process procedure. It is also for this reason that the Board has indicated that it will attempt
to make accounting changes on an evolutionary rather than a revolutionary basis.

Thus, economic consequences cannot be ignored when standards are set. On the other hand, conceptual, logical and
technical accounting considerations are also essential to maintaining and improving existing standards. The real issue is
striking a balance between the two.

The FASB has attempted to strike this balance by giving paramount consideration to agreed concept, principles, and logical
consistency in setting accounting standards. The answer produced by following this process is presumptively adopted,
absent compelling evidence that cost/benefit and economic consequence considerations would make the solution
unacceptable.

The fundamental reason for the primacy of conceptual considerations is the importance of neutrality and objectivity to a
credible and effective standard setting process. A basic precept followed by the Board is to be objective in its decision
making and to ensure, insofar as possible, the neutrality of information resulting from its standards. To be neutral,
information must reflect economic activity as faithfully as possible without coloration for the purpose of influencing behavior
in any particular direction.

The essence of the notion of neutrality is freedom from bias toward an identified result. Thus, to be neutral, the standard
setter must avoid predetermining a desired result and selecting a standard to induce that result.

In the neutrality view, financial accounting and reporting is a system of measurement which should report economic activity
as objectively and as faithfully as possible. In this view, just as other measurement systems--academic grading systems,
systems of weights and measures, and temperature scales, for example--are expected to be objective and neutral, so also is
the financial reporting system. The neutrality notion does not mean that the way information is reported does not have
consequences. It does, just as the results produce by any measurement system can cause the user to take certain actions.
Neutrality does mean, however, that the selection of the measurement system itself should not be influenced by a desired
result. If a measurement system is viewed as not being neutral, or as biased to induce a particular result, resulting information
loses credibility. Credibility is enhanced if, both in fact and in perception, reported information is verifiable and can be relied
upon faithfully to represent what it purports to represent--provided there is no bias in the selection of what is reported.
                                     A LOOK AT HISTORY

A look at history may be useful. Although many might disagree with how it has done so, the Board has clearly factored
economic consequence considerations into its standard setting decisions. And it has done so in various ways.

Cost/benefit considerations have been at least partially responsible for some agenda decisions. For example, since its
issuance in 1976, Statement 13, dealing with accounting for leases, has been widely criticized as too procedural and
complex as well as lacking in conceptual foundation for its specific and detailed rules for segregating leases which should be
capitalized from those which should not. The FASB has been urged to readdress the lease accounting subject with a view
towards promulgating a new standard which would both have a stronger conceptual basis and be simpler in application. On
several occasions the Board considered formally adding a project to reconsider lease accounting to its agenda. So far the
Board has decided not to do so. This is in part for cost/benefit reasons. The Board has not become convinced that it would
be able to produce a conceptually superior standard which would produce information of sufficiently enhanced usefulness to
justify the costs involved both in achieving acceptability of the standard and in effectively implementing the standard.

Sometimes cost/lbenefit considerations are the reason for issuing a statement. For example, Statement 89 was issued to
supersede Statement 33 requiring certain inflation disclosures. Cost/benefit considerations were used to justify this action. A
large body of research literature was available about the lack of usefulness of disclosures made pursuant to Statement 33.
The Board cited that literature as the basis for rescinding Statement 33. The Board became convinced that the usefulness of
the information being provided did not justify a requirement to continue its issuance.

Another example was Statement 104 which amended Statement 95 dealing with cash flow statements. Statement 104 relied
on cost/benefit considerations to permit banks, savings institutions, and credit unions to report cash flows on a net rather
than gross basis for certain deposit and lending activities.

Sometimes cost/benefit considerations affect decisions concerning specific provisions of accounting standards. For
example, in its Exposure Draft on accounting for the costs of post retirement benefits, the Board proposed to require a
number of specific disclosures about the obligation to provide post retirement benefits and about the cost of providing those
benefits. About two thirds of the commentators on the Exposure Draft opined that the proposed disclosures were too
extensive, too complex, and not cost/beneficial. In light of these comments, the Board did reconsider the proposed
disclosures and simplified some of them in moving ahead to a final accounting standard.

Sometimes economic consequence considerations temper the basic provisions of an accounting standard. Thus, in its
Statement 87, dealing with employer's accounting for pensions, the Board adopted certain provisions concerning the
delayed recognition of gains or losses and footnote disclosure of pension assets and liabilities. These provisions were
something less than what the Board believed to be conceptually appropriate but were adopted to accommodate constituent
concerns about both dramatic changes in balance sheet presentations and undue earnings volatility. In its basis for
conclusions, the Board noted that "it believes that it would be conceptually appropriate and preferable to recognize a net
pension liability or asset measured as the difference between the projected benefit obligation and plan assets, either without
delay in recognition of gains or losses, or perhaps with gains and losses reported currently in comprehensive income but not
in earnings. However, it concluded that those approaches would be too great a change from past practice to be adopted at
the present time. In light of the differences in respondents' views and the practical considerations noted, the Board
concluded that the provisions of this statement as a whole represent an improvement in financial reporting."'

Lastly, the Board very commonly factors economic consequence considerations into decisions about the required effective
dates of its statements and the transition provisions for adopting new standards. For example, referring again to Statement
87, the Board noted that it "continues to believe that transition is a practical matter and that a major objective of transition is
to minimize the cost and to mitigate the disruption involved, to the extent that is possible without unduly compromising the
objective of enhancing the ability of financial statements to provide useful information."[2] Clearly, practicality questions
involve considerations of cost/benefit and economic consequences.
                                        CONCLUSIONS

There is no simple answer to the question of how much weight should be accorded economic consequences in formulating
accounting standards. While it is clear that these consequences cannot be ignored, considerations of conceptual
consistency, neutrality, and objectivity are, or should be paramount in the establishment of standards. The question is not
one of whether conceptual or consequence considerations should prevail to the exclusion of the other, but rather what the
appropriate balance is that can be struck between the two.

The course that the FASB has followed is one of giving paramount consideration to objectivity, neutrality, and conceptual
consistency with agreed accounting objectives and principles. Conclusions reached by following these considerations are
adopted, absent compelling evidence about unacceptable consequences. Just when these consequences would be
unacceptable is a matter of judgment in each case. Applying the appropriate judgment to achieve the right balance will
continue to be a challenging task.

[1] FASB Statement No. 87, Employer's Accounting for Pensions, par. 107.

[2] Ibid., par. 256.

Expressions of individual views by members of the FASB and its staff are encouraged. The views expressed in this article
are those of Victor H. Brown. Official positions of the FASB on accounting matters are determined only after extensive
due process and deliberation.

~~~~~~~~

By Victor H. Brown

Victor H. Brown is a member of The Financial Accounting Standards Board.

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Source: Accounting Horizons, Sep90, Vol. 4 Issue 3, p89, 9p.