An Analysis of Accounting Principles Board Opinion No. 18

The purpose of this paper is to look at an official opinion of the Accounting Principles Board, analyze the selected opinion, and determine what affect the opinion will have on the business world. The Opinion selected is APB Number Eighteen. The title of the Opinion is The Equity Method of Accounting for Investments in Common Stock. The main hypothesis that is to be tested in this paper is the hypothesis that APB Number Eighteen will generally have an affect only on large companies. These large companies, in turn, are only a small percentage of the companies on which an accountant's opinion is rendered. | This paper is divided into six sections. The first section will define the terms used both in the Opinion and in this paper. It will also restate the principles and guidelines set forth in the Opinion. Next, three methods for valuing investments in common stock will be stated and defined in section two. The next two sections, three and four, will be an analysis of the Opinion. Section three will state the shortcomings of the Opinion and offer solutions on how these problem areas should be handled. The second part of this analysis will describe the affect that the issuance of Accounting Principles Board Opinion Number Eighteen will have on the past official pronouncements that have previously been issued. | Sections five and six will discuss how the Opinion will affect the real world and how the Opinion will be implemented. Section five will suggest ways of avoiding the Opinion when it does apply. These suggestions will indicate the various ways companies will use to avoid compliance when compliance is not in the best interest of the company. The final section will test the hypothesis that APB Number Eighteen will only affect the financial statements of large companies. This theory will be tested by taking a sample of companies and determining what percentage of the companies are affected by the Opinion.

Grantor dc:publisher

Creighton University

Year dc:date.issued

1972

Author dc:creator

• Schultz, Michael L.

Advisor dc:contributor.advisor

• Andrews, Charles T.

Statement dc:rights

• A non-exclusive distribution right is granted to Creighton University and to ProQuest following the publishing model selected above.

Language dc:language.iso

en_US

Handle dc:identifier.uri

http://hdl.handle.net/10504/115482

OAI identifier oai:identifier

oai:cdr.creighton.edu:10504/115482