Implications for GAAP from an analysis of positive research in accounting
By: S.P. Kothari, Karthik Ramanna, Douglas J. Skinner
Contributors: Ramanna, Karthik; Skinner, Douglas J.; Harvard Business School
Edition: 4th rev.
Series: Working paper / Harvard Business School -- 09-137; Working paper (Harvard Business School) -- 09-137.
Publisher: Harvard Business School
Published: 2009
Place of publication: [Boston]
Language: eng
Number of pages: 115
Description: Based on extant literature, we review the positive theory of GAAP. The theory predicts that GAAP's principal focus is on control (performance measurement and stewardship) and that verifiability and conservatism are critical features of a GAAP shaped by market forces. We recognize the advantage of using fair values in circumstances where these are based on observable prices in liquid secondary markets but caution against expanding fair values to financial reporting more generally. We conclude that rather than converging U.S. GAAP with IFRS, competition between the FASB and the IASB would allow GAAP to better respond to market forces.
Notes: "First draft: May 30, 2009, this draft: March 7, 2010"--added t.p.

"June 2009, revised July 2009, August 2009, September 2009, March 2010"--Publisher's website.

Includes bibliographical references.