An Analysis of Accounting Principles Board Statement No. 4.

This article presents an analysis of Accounting Principles Board Statement 4. The statement attempts to provide a structure that can be used in approaching some of the vexing practical problems that have been plaguing the profession in recent years. The objectives set forth in the statement are interesting, aspire to completeness and could lead to considerable change in financial accounting in the future. And the description of present generally accepted accounting principles (GAAP) is the first description of our present situation that is both systematic and authoritative. Because of these and other features and because it is ambitious in scope theorist should find much in Statement to analyze and discuss. The developmental purpose is to pro vide a basis for guiding the future development of financial accounting. The statement has implicit purposes as well as explicit ones. It sets out a frame work that the Board wants to test in the marketplace of ideas. The statement also sets out a tentative list of objectives of financial accounting that needs testing and development in the crucible of heated discussion. Finally, the statement serves the important function of calling the Board it- self back to a more fundamental approach.