Implications for GAAP from an analysis of positive research in accounting
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 us...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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Elsevier
2015
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| Online Access: | http://hdl.handle.net/1721.1/98830 https://orcid.org/0000-0003-1120-1177 |
| _version_ | 1826202024184643584 |
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| author | Ramanna, Karthik Skinner, Douglas J. Kothari, S. P. |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Ramanna, Karthik Skinner, Douglas J. Kothari, S. P. |
| author_sort | Ramanna, Karthik |
| collection | MIT |
| 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. |
| first_indexed | 2024-09-23T12:00:40Z |
| format | Article |
| id | mit-1721.1/98830 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T12:00:40Z |
| publishDate | 2015 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | mit-1721.1/988302022-09-27T23:28:48Z Implications for GAAP from an analysis of positive research in accounting Ramanna, Karthik Skinner, Douglas J. Kothari, S. P. Sloan School of Management Kothari, S. P. 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. 2015-09-18T13:58:33Z 2015-09-18T13:58:33Z 2010-09 Article http://purl.org/eprint/type/JournalArticle 01654101 http://hdl.handle.net/1721.1/98830 Kothari, S.P., Karthik Ramanna, and Douglas J. Skinner. “Implications for GAAP from an Analysis of Positive Research in Accounting.” Journal of Accounting and Economics 50, no. 2–3 (December 2010): 246–286. https://orcid.org/0000-0003-1120-1177 en_US http://dx.doi.org/10.1016/j.jacceco.2010.09.003 Journal of Accounting and Economics Creative Commons Attribution-Noncommercial-NoDerivatives http://creativecommons.org/licenses/by-nc-nd/4.0/ application/pdf Elsevier SSRN |
| spellingShingle | Ramanna, Karthik Skinner, Douglas J. Kothari, S. P. Implications for GAAP from an analysis of positive research in accounting |
| title | Implications for GAAP from an analysis of positive research in accounting |
| title_full | Implications for GAAP from an analysis of positive research in accounting |
| title_fullStr | Implications for GAAP from an analysis of positive research in accounting |
| title_full_unstemmed | Implications for GAAP from an analysis of positive research in accounting |
| title_short | Implications for GAAP from an analysis of positive research in accounting |
| title_sort | implications for gaap from an analysis of positive research in accounting |
| url | http://hdl.handle.net/1721.1/98830 https://orcid.org/0000-0003-1120-1177 |
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