Abstract The development of financial reporting in the U.S. has been closely related to the development of business corporations as means of carrying on much of the industrial activity of the nation. Both of these developments have taken place largely since 1900. It appear that a definite need exists at the present time for another examination of the old idea that disclosure, which includes the presentation of all significant accounting information as accurately and informatively as possible, is the guiding objective of financial statements. The article is concerned with this idea as it relates to recent discussions regarding the purpose and scope of published income reports of corporations whose shares are widely held. The unsettled controversy between accountants favoring all-inclusive income reports and those favoring selective income reports, which exclude certain special items of gain and loss, cannot be fully understood, unless related to the question of whether disclosure is an underlying objective of corporate reporting.
Wendell P. Trumbull (Thu,) studied this question.