Abstract Students should realize that accounting standards are not rules for the sake of rules; they should understand the need for accounting standards. Such a need arises because producers of financial statements may have different objectives than other parties with interests in a company. Actions which are in the best interest of those who produce financial statements may not be in the best interest of the company's other constituents. This case provides a structured environment for students to study and apply original accounting pronouncements. It is one of many real-world accounting issues from the savings and loan (S&L) crisis which students can research. Al-though they operated under different names, the S&Ls discussed in Central Coast Savings represent real companies. By studying an acquisition that took place prior to FAS 72, Accounting for Certain Acquisitions of Banking or Thrift Institutions, students will see that accounting practices for acquisitions of failing thrifts did not accurately represent economic events. This case helps students under-stand the issues that created a need for FAS 72. Students begin to realize that accounting standards attempt to make financial statements better reflect economic events.
Tad Miller (Wed,) studied this question.