ABSTRACT
Kenneth MacNeal is widely known as author of a vigorous advocacy of market-based valuations in financial statements. This chapter presents some biographical data on MacNeal and discusses the reason why he wrote Truth in Accounting. It examines the main points of the argument presented in his book, and this is followed by a discussion of the major published criticism of the book. Following a brief treatment of the contributions of early valuation theorists, the influence of MacNeal’s writings among professionals, policy makers, and academics is reviewed. His argument is that small investors are deceived by financial statements that are predicated on the accountant’s notions of “realization” and “conservatism.” In Truth in Accounting, MacNeal reviews the theoretical justifications for the realization and conservatism notions, and finds them wanting. Kenneth MacNeal was the author of Truth in Accounting, a 1939 book known for its undiluted advocacy of “economic value” accounting.
