Report of the Committee on Concepts and Standards--General.

Abstract The article presents a report of the executive committee of the journal The American Review on general concepts and standards of accounting. The charge of the committee was to consider and to advise the Executive Committee through the Director of Research, what subjects should be reviewed and studied by task-groups of the Association in the preparation of statements supplementary to Accounting and Reporting Standards for Corporate Financial Statements. The committee has considered an extensive list of specific accounting problems. But this has led to the conclusion that the greatest need would be served by study and clarification of six underlying accounting concepts: business entity, the matching concept, realization, materiality, consistency and objectivity. According to a research report, the idea that the existence of a distinct business entity is something, which the accountant universally assumes, is not a current innovation; but its importance has recently been stressed. The concept of matching costs and related revenues in the determination of periodic income is firmly embedded in accounting literature and in accounting practice.