On Pooling

BY FRANK THOMAS MURPHY

“Everyone Out of the Pool,” (JofA, May00, page 45) lists several reasons the FASB has for eliminating pooling-of-interests accounting: less information, value disregards, financial statement user comparison difficulties and earnings distortions.

Much larger distortions, value disregards and comparison problems occur on a purchase transaction when historical (old) values are combined with fair market (new) values. The financial statement user has far less reliable information than when a pooling combines the historical values of two entities.

Frank Thomas Murphy, CPA
Glendale, California

SPONSORED REPORT

Keeping client information safe in an age of scams and security threats

A look at the Dirty Dozen tax scams and ways to protect taxpayer information.

TAX PRACTICE CORNER

More R&D tax help

"Can I use the R&D credit?" PATH Act enhancements make the credit more attractive to a wider range of taxpayers.

QUIZ

Learn to choose between ‘who’ and ‘whom’

Writers can stumble over who and whom (or whoever and whomever). If you write for business, this quiz can help make your copy above reproach.