| List of figures | p. xiv |
| List of tables | p. xv |
| Foreword | p. xvi |
| Preface | p. xviii |
| Acknowledgments | p. xxii |
| Note on assignments | p. xxiii |
| Prologue: Thinking independently | p. 1 |
| Setting the stage | p. 25 |
| The nature of financial reporting | p. 27 |
| Issuers and users | p. 27 |
| Functions of records and reports | p. 28 |
| Financial reporting as mapping | p. 32 |
| Venture reporting versus time period reporting | p. 33 |
| Financial accounting versus financial reporting | p. 35 |
| Functions of bookkeeping, accounting, and financial reporting | p. 37 |
| Financial statements versus economics | p. 39 |
| Financial reporting versus financial analysis | p. 39 |
| Financial reporting versus income tax accounting | p. 40 |
| A science or an art? | p. 41 |
| Discussion questions | p. 41 |
| The incentives of the parties to financial reporting | p. 43 |
| Positive and normative research | p. 44 |
| Conflicting incentives | p. 46 |
| Incentives of users | p. 47 |
| Incentives of issuers | p. 48 |
| Incentives of outside auditors | p. 66 |
| Incentives of citizens | p. 70 |
| Incentives of standard-setters and regulators | p. 70 |
| Incentives of elected government officials | p. 71 |
| Incentives of teachers of financial reporting | p. 73 |
| Discussion questions | p. 74 |
| Designing financial statements by starting with desired results or by applying analysis for the benefit of the users | p. 75 |
| Starting with desired results in designing financial statements | p. 76 |
| Applying analysis for the benefit of the users in designing financial statements | p. 83 |
| Discussion questions | p. 104 |
| Classes of events | p. 104 |
| Current GAAP by classes of events | p. 106 |
| The indoctrination of financial reporters | p. 118 |
| Origin of the indoctrination of financial reporters | p. 119 |
| Manifestations of the indoctrination of financial reporters | p. 121 |
| Virginia and financial reporting | p. 130 |
| Discussion questions | p. 131 |
| Issues underlying financial reporting | p. 133 |
| Views on the desirability of stabilizing income reporting by the design of GAAP | p. 135 |
| Views of official organizations | p. 135 |
| Reasons that have been given in favor of stabilizing income reporting by the design of GAAP | p. 138 |
| Reasons that have been given in opposition to stabilizing income reporting by the design of GAAP | p. 142 |
| Conclusion on the desirability of stabilizing income reporting by the design of GAAP | p. 144 |
| Lip service | p. 146 |
| Debating points | p. 146 |
| Measurement in the preparation of financial statements | p. 147 |
| Measurement, observation, quantification, and calculation | p. 147 |
| Time of measurement | p. 149 |
| Measurable attributes and units of measure | p. 152 |
| Defining the unit of measure in terms of the powers of money | p. 152 |
| Surrogate measures | p. 154 |
| Measurement and calculation in financial statements | p. 155 |
| Measurement and estimation in financial statements | p. 156 |
| Debating points | p. 157 |
| Historical report | p. 159 |
| Pertinent characteristics of time | p. 160 |
| Reflecting in financial statements the financial effects of supposed future events | p. 167 |
| Reflecting in financial statements current conditions that indirectly involve the future | p. 172 |
| Reflecting in financial statements the financial effects of events that might have occurred but didn't | p. 178 |
| Going concern | p. 180 |
| Debating points | p. 181 |
| The focus of attention in financial reporting | p. 183 |
| A handy fiction? | p. 183 |
| Selection of the reporting entity as classification | p. 184 |
| The original focus of attention | p. 184 |
| The incomplete evolution of the concept of the focus of attention | p. 185 |
| Theories about the reporting entity | p. 185 |
| A complete evolution of the concept of the focus of attention | p. 190 |
| Debating points | p. 200 |
| The elements of the reporting entity represented in financial statements | p. 201 |
| Economic resources | p. 202 |
| Articulation | p. 203 |
| Definitions of the elements | p. 204 |
| Accrual basis | p. 215 |
| Nonarticulation | p. 218 |
| Debating points | p. 222 |
| Broad issues in financial reporting | p. 223 |
| The current broad principles | p. 225 |
| Statement of the current broad principles | p. 228 |
| Evaluation of the current broad principles | p. 238 |
| Conformity of the current broad principles with the incentives of the issuers, outside auditors, standard-setters, and regulators | p. 249 |
| Financial reporting as ritual | p. 255 |
| Debating points | p. 258 |
| Inflation reporting | p. 260 |
| Defining the unit of measure in terms of general purchasing power | p. 261 |
| Inflation reporting and current value reporting | p. 271 |
| Inflation reporting and reporting on foreign operations | p. 272 |
| Debating points | p. 272 |
| Presenting discounted future cash receipts and payments in financial statements | p. 273 |
| The "ideal basis" | p. 274 |
| The existence of present value | p. 275 |
| The parentage of the concept | p. 276 |
| The magic of discounting | p. 280 |
| The reversal of cause and effect | p. 281 |
| Presenting solely the financial effects of supposed future events | p. 282 |
| Nonexistent future events | p. 282 |
| Conclusion on whether present value is a current condition of the reporting entity | p. 283 |
| The ultimate form of allocation | p. 284 |
| Debating points | p. 285 |
| Proposed broad principles for reporting on assets using current buying prices | p. 286 |
| Current buying prices | p. 286 |
| Presenting fiction | p. 289 |
| Using the price of an asset not owned or sold | p. 293 |
| Deprival value | p. 297 |
| Supplementary information on current buying prices | p. 298 |
| Debating points | p. 299 |
| Proposed broad principles for reporting on assets using current selling prices | p. 300 |
| The only current measurable financial attribute | p. 301 |
| Class A and Class B aspects | p. 304 |
| Reporting the Class A aspect and disclosing information concerning the Class B aspect | p. 305 |
| CSPR and the user-oriented criteria | p. 308 |
| Evidence for the measurement of current selling prices | p. 311 |
| CSPR and stable income reporting-the foremost objection to CSPR | p. 314 |
| Foremost conceptual objections to CSPR | p. 315 |
| Other conceptual objections to CSPR | p. 319 |
| Other practical objections to CSPR | p. 325 |
| Wishful thinking | p. 328 |
| Quiet appeal | p. 328 |
| Debating points | p. 333 |
| Current and proposed broad principles for reporting on liabilities | p. 334 |
| Events causing a liability to be incurred | p. 335 |
| Names of payments required | p. 336 |
| Events causing a liability to be discharged | p. 336 |
| Current broad principle for reporting on a liability | p. 337 |
| Proposed broad principles for reporting on a liability | p. 340 |
| Debating points | p. 350 |
| Reflecting or reporting prospects in financial statements | p. 351 |
| Reflecting prospects in financial statements | p. 353 |
| Reporting prospects in financial statements | p. 355 |
| Conclusion on reflecting or reporting prospects in financial statements | p. 362 |
| Debating points | p. 362 |
| Disclosure in financial reporting | p. 363 |
| A tangle of trees | p. 364 |
| Information to help users evaluate current prospects | p. 365 |
| Investments in prospects | p. 366 |
| Supplementary information | p. 366 |
| Disclosure overload | p. 373 |
| Reporting in the financial statements versus disclosure in the notes | p. 379 |
| Debating points | p. 379 |
| Specific issues in financial reporting | p. 381 |
| Reporting in connection with stock options granted to employees | p. 383 |
| Round one | p. 383 |
| Round two | p. 397 |
| Debating points | p. 398 |
| Alternative financial statement reporting practices | p. 399 |
| Standard-setting and alternatives | p. 399 |
| Power to reduce alternatives | p. 400 |
| Alternatives reduced | p. 401 |
| Alternatives not reduced-notorious cases | p. 402 |
| Alternatives not reduced-other significant areas | p. 406 |
| The users yawn | p. 409 |
| Debating points | p. 410 |
| Display on financial statements | p. 411 |
| Display on the balance sheet | p. 411 |
| Display on the statement of income | p. 419 |
| Display on the statement of cash flows | p. 420 |
| Debating points | p. 421 |
| Reporting on income taxes | p. 422 |
| Deferred taxes | p. 424 |
| Comprehensive interperiod income tax allocation | p. 426 |
| The rationale | p. 427 |
| The analysis | p. 428 |
| Net-of-tax | p. 441 |
| Earnings management | p. 441 |
| Debating points | p. 441 |
| Reporting on foreign operations | p. 443 |
| Four sets of translation rules | p. 443 |
| Catch-22 | p. 450 |
| Accounting for foreign operation | p. 451 |
| Reporting on foreign operations and inflation reporting | p. 455 |
| Debating points | p. 457 |
| Reporting after business combinations and on related goodwill | p. 458 |
| Requirements before the battle | p. 458 |
| The battle | p. 461 |
| Results of reporting after business combinations in conformity with Opinions Nos 16 and 17 | p. 466 |
| The new requirements | p. 467 |
| Reporting after business combinations to conform with the user-oriented criteria | p. 468 |
| Debating points | p. 471 |
| Reporting on employee benefits | p. 472 |
| Reporting on defined benefit pensions | p. 472 |
| Postretirement benefits other than pensions | p. 484 |
| Advance funding | p. 487 |
| Earnings management | p. 487 |
| Debating points | p. 487 |
| Reporting on leases and executory contracts | p. 489 |
| Capitalize all active noncancelable leases? | p. 489 |
| Definition of an executory contract | p. 491 |
| Capitalize all executory contracts? | p. 492 |
| Are active leases executory contracts? | p. 493 |
| Reporting on leases | p. 494 |
| Debating points | p. 498 |
| Consolidated financial statements | p. 499 |
| Should consolidated financial statements be presented? | p. 500 |
| Consolidation policy | p. 501 |
| A fictitious reporting entity? | p. 503 |
| Treatment of noncontrolling stockholdings | p. 503 |
| Debating points | p. 506 |
| Epilogue: the hijacking of GAAP | p. 507 |
| Appendix | p. 513 |
| Bibliography | p. 517 |
| Author index | p. 546 |
| Subject index | p. 552 |
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