Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

LEGAL ACCEPTANCE OF ACCOUNTING PRINCIPLES IN GREAT BRITAIN AND THE UNITED STATES: SOME LESSONS FROM HISTORY

Jean Margo Reid
The Accounting Historians Journal
Vol. 15, No. 1 (Spring 1988), pp. 1-27
Stable URL: http://www.jstor.org/stable/40697936
Page Count: 27
  • Read Online (Free)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
LEGAL ACCEPTANCE OF ACCOUNTING PRINCIPLES IN GREAT BRITAIN AND THE UNITED STATES: SOME LESSONS FROM HISTORY
Preview not available

Abstract

This paper examines and contrasts nineteenth century case law in Great Britain and the United States in which courts had to decide whether to accept accounting concepts having to do with making provisions for depreciation, amortization and depletion. It should be emphasized that the courts were not arguing about accounting theory, per se; they were deciding particular disputes, which depended on the meaning in each case of pro "its. By 1889, when Lee v. Neuchatel Asphalte Company was decided, British courts had rejected accepted fixed asset accounting conventions in determining profits in tax, dividend, and other cases while United States courts accepted these conventions, except in the case of wasting asset companies. This historical contrast is of particular interest because a recent reversal of these countries legal stances has occurred through legislation. In the United States, the Revised Model Business Corporation Act and the legislatures of several states have now rejected accounting concepts of profit as the legal test for dividends and other shareholder distributions. The reasons for this rejection appear to be similar to those used by the British Court of Appeal nearly 100 years ago. In Great Britain, on the other hand, the 1980 Companies Act reverses much of the Lee case and places on accountants new responsibilities for determining whether company distributions to shareholders would violate the capital maintenance provisions of the act.

Page Thumbnails

  • Thumbnail: Page 
[1]
    [1]
  • Thumbnail: Page 
2
    2
  • Thumbnail: Page 
3
    3
  • Thumbnail: Page 
4
    4
  • Thumbnail: Page 
5
    5
  • Thumbnail: Page 
6
    6
  • Thumbnail: Page 
7
    7
  • Thumbnail: Page 
8
    8
  • Thumbnail: Page 
9
    9
  • Thumbnail: Page 
10
    10
  • Thumbnail: Page 
11
    11
  • Thumbnail: Page 
12
    12
  • Thumbnail: Page 
13
    13
  • Thumbnail: Page 
14
    14
  • Thumbnail: Page 
15
    15
  • Thumbnail: Page 
16
    16
  • Thumbnail: Page 
17
    17
  • Thumbnail: Page 
18
    18
  • Thumbnail: Page 
19
    19
  • Thumbnail: Page 
20
    20
  • Thumbnail: Page 
21
    21
  • Thumbnail: Page 
22
    22
  • Thumbnail: Page 
23
    23
  • Thumbnail: Page 
24
    24
  • Thumbnail: Page 
25
    25
  • Thumbnail: Page 
26
    26
  • Thumbnail: Page 
27
    27