Implications for GAAP from an Analysis of Positive Research in Accounting

S.P. Kothari (), Karthik Ramanna () and Douglas J. Skinner ()
Additional contact information
S.P. Kothari: MIT Sloan School of Management
Karthik Ramanna: Harvard Business School, Accounting and Management Unit
Douglas J. Skinner: University of Chicago Booth School of Business

No 09-137, Harvard Business School Working Papers from Harvard Business School

Abstract: Based on extant literature, we review the positive theory of GAAP. The theory predicts that GAAP's principal focus is on control (performance measurement and stewardship) and that verifiability and conservatism are critical features of a GAAP shaped by market forces. We recognize the advantage of using fair values in circumstances where these are based on observable prices in liquid secondary markets, but caution against expanding fair values to financial reporting more generally. We conclude that rather than converging U.S. GAAP with IFRS, competition between the FASB and the IASB would allow GAAP to better respond to market forces.

Pages: 126 pages
Date: 2009-05, Revised 2010-09
References: Add references at CitEc
Citations: View citations in EconPapers (148)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:09-137

Access Statistics for this paper

More papers in Harvard Business School Working Papers from Harvard Business School Contact information at EDIRC.
Bibliographic data for series maintained by HBS ().