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

NEWS

IRS sets start date for tax season

The IRS announced that tax season will start in late January and that it will issue refunds to taxpayers despite the partial shutdown of the federal government.

PODCAST

Why CPAs can’t wait on automation tools

What do accounting firms waiting on others to develop AI, automation, and data analytics tools have in common with a baseball fan sitting in a stadium filling with water at an exponential rate? The answer could determine your firm’s fate.