Publication Date


Document Type


First Advisor

Baker, Richard E.

Degree Name

B.S. (Bachelor of Science)

Legacy Department

Department of Accountancy


The purpose surrounding the basis of this research paper are to try and identify possible reasons for companies to adopt Financial Accounting Standard Board Statement prior to the requirement date. The scope limitation of the paper were the time and length allocated for the project. These factors determined that only one Statement would be explored, Statement 106, would be examined in depth, and that only one industry, the food industry, would be examined. Other limitations were the availability of documents, and capability of understanding information. Research methods used were examination of companies annual reports which comprised the part of the literature review, the data necessary for examining companies which adopted Statement 106. Many articles on the adoption of past FASB Statement were used in obtaining an understanding of how companies may have decided on early adoption of other Statements besides Statement 106. Major findings included such theories as the "big bath" theory and the smoothing technique. It was found that out of the 10 companies surveyed in the food industry, 7 companies have adopted Statement 106 early. For one company the adoption did not effect the financial position of the company, while for others the magnitude of the cumulative effect of accounting change was significant.


39 pages




Northern Illinois University

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Alt Title

Early Adoption of FASB's Statements

Media Type