ABSTRACT
Solid accounting textbooks; respectable, well-filled professional journals; the sober, weighty releases of the accounting institutes, all these reflect the attention and concern which are now being given the subject of financial reporting. The accounting profession regards itself as the official custodian of the art of financial reporting. The conventional balance sheet and income statement are supposed to supply the basic information under each of these headings, the balance sheet showing the present wealth of the enterprise and the income statement indicating its earning power. A balance sheet must be made up on the basis of current values if it is to make sense to anyone studying the financial stature of an enterprise. But for the annual statements of a large commercial corporation, current values alone make sense. Accounting is not based on 'fundamental principles' in any recognized sense of these words, but on sheer utility or usefulness.
