Some Comments on "Dirty Pooling".

Abstract In this article the author comments on the work of Abraham J. Briloff. "Dirty Pooling." He states that in the paper two major points are made. First that a proforma restatement of the earnings histories of two or more companies contemplating a business combination to be recorded as a pooling of interests might be misleading to stockholders, and second, that academicians should actively engage in empirical research and seek wide circulation of their findings. The major objective of the paper was to present two illustrations and to use them as a basis for discrediting and disowning the pooling device in the interest of fair and relevant reporting of corporate economic data. But in the author's opinion this objective was not achieved. The central role played by the concept of the accounting entity in pooling-of-interests accounting is ignored. It is generally accepted that the concept of the accounting entity embraces an economic entity as well as a legal entity and that all of the parameters of the conventional accounting model apply to the given accounting entity.