Professor Sterling addressed the Accounting Faculty and PhD students of the University of British Columbia on 31 May 1971. He would further assert that this is no contradiction to his book, since the latter deals neither with tax accounting nor managerial accounting but exclusively with financial accounting. Purpose-oriented approach consists of starting the analysis under highly simplified assumptions and then to progress, step by step, to more complicated or more realistic situations. Although this method does not always lead to realistic and satisfactory solutions, it has great merit and may, indeed, not have been employed to a sufficient extent in traditional accounting. The goal of the first accounting system is to supply sufficient or even optimal information to investors, and to satisfy a minimum requirement of disclosure enforced by law. In the accounting literature has become aware that the separation between measurement and prediction rests arbitrary a criterion and the recent Report of the Committee on Foundations of Accounting Measurement.