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The SEC rules historical cost accounting: 1934 to the 1970s

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  • Stephen Zeff

Abstract

From its founding in 1934 until 1972 the SEC, and especially its chief accountant, disapproved of most upward revaluations and general price-level restatements of fixed assets as well as depreciation charges based thereon. This article is a historical study of the evolution of the SEC's policy on upward revaluations and restatements of non-financial assets. It treats episodes prior to 1972 when the private-sector bodies that established accounting principles sought to gain a degree of acceptance for such revaluations and restatements but were consistently rebuffed by the SEC. The SEC reversed its policy on upward revaluations during the period from 1972 to the end of the 1970s. Throughout the article, the author endeavours to explain the factors that influenced the successive positions taken by the SEC.

Suggested Citation

  • Stephen Zeff, 2007. "The SEC rules historical cost accounting: 1934 to the 1970s," Accounting and Business Research, Taylor & Francis Journals, vol. 37(S1), pages 49-62.
    • Handle: RePEc:taf:acctbr:v:37:y:2007:i:s1:p:49-62
    DOI: 10.1080/00014788.2007.9730085
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    Cited by:

    1. Richard Macve, 2010. "The Case for Deprival Value," Abacus, Accounting Foundation, University of Sydney, vol. 46(1), pages 111-119, March.
    2. Baker C. Richard, 2019. "Commentary on Braun’s “The Ecological Rationality of Historical Costs and Conservatism”," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 9(1), pages 1-9, March.
    3. Marc NIKITIN, 2013. "Can Aristotle Help Us Specify the Very Nature of Management problem?," LEO Working Papers / DR LEO 2253, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    4. Stephen A. Zeff, 2008. "IFRS Developments in the USA and EU, and Some Implications for Australia," Australian Accounting Review, CPA Australia, vol. 18(4), pages 275-282, December.
    5. Olante, Maria Elena & Lassini, Ugo, 2022. "Investment property: Fair value or cost model? Recent evidence from the application of IAS 40 in Europe," Advances in accounting, Elsevier, vol. 56(C).
    6. Marc Nikitin, 2014. "Can Aristotle Help Us Specify the Very Nature of Management Problem?," Working Papers halshs-01015082, HAL.
    7. Bougen, Philip D. & Young, Joni J., 2012. "Fair value accounting: Simulacra and simulation," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 23(4), pages 390-402.
    8. Iulia Jianu & Roxana Ruiu & Ionel Jianu & Mihaita Ruiu, 2013. "The Value and the Evaluation Process in Accounting," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 3(6), pages 1-15, December.
    9. Ray Ball, 2009. "Market and Political/Regulatory Perspectives on the Recent Accounting Scandals," Journal of Accounting Research, Wiley Blackwell, vol. 47(2), pages 277-323, May.
    10. Gwilliam, David & Jackson, Richard H.G., 2008. "Fair value in financial reporting: Problems and pitfalls in practice," Accounting forum, Elsevier, vol. 32(3), pages 240-259.
    11. Glover Jonathan, 2014. "Have Academic Accountants and Financial Accounting Standard Setters Traded Places?," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 4(1), pages 17-26, February.
    12. Macve, R.H., 2015. "Fair value vs conservatism? Aspects of the history of accounting, auditing, business and finance from ancient Mesopotamia to modern China," The British Accounting Review, Elsevier, vol. 47(2), pages 124-141.
    13. Jannis Bischof & Holger Daske, 2016. "Interpreting the European Union’s IFRS Endorsement Criteria: The Case of IFRS 9," Accounting in Europe, Taylor & Francis Journals, vol. 13(2), pages 129-168, May.
    14. Erb, Carsten & Pelger, Christoph, 2015. "“Twisting words”? A study of the construction and reconstruction of reliability in financial reporting standard-setting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 13-40.
    15. Stephen A. Zeff & Vaughan S. Radcliffe, 2010. "The Ontario Securities Commission on Accounting and Auditing from the 1960s to 2008 – Part 1: 1960s to 1985," Accounting Perspectives, John Wiley & Sons, vol. 9(1), pages 29-53, March.
    16. Corinne Cortese & Lee Moerman & Millicent Chang, 2022. "Is the extractive industries standard still fit for purpose?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2807-2838, June.

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