Publication Date

1-1-1988

Document Type

Dissertation/Thesis

First Advisor

Delaney, Patrick R.

Degree Name

B.S. (Bachelor of Science)

Legacy Department

Department of Accountancy

Abstract

The recent outbreak of company restructuring has demanded attention. The two most common methods involve the write-down of assets and the restructure of debts. When writing down assets, a company aggregates its losses and reports one great loss in the fourth quarter of its fiscal year. Financial statement users view this as "big bath accounting" and demand more timely information. Management merely views this as a function of identification--when they can finally gather sufficient evidence to measure the value of asset impairment. In debt restructuring, a company reports gains to the extent that its obligations have been discharged. A debate still in process is concerned with whether the reported gains are justifiable. Questions have arisen as to when the gain are earned as part of the culmination of the earnings process. Informative and complete financial statement disclosures can alleviate some doubts the users may have. Auditors have the responsibility to determine that the financial statements present fairly the company's financial position, but it is up to the user evaluate the company's financial health and future prospects.

Extent

14 pages

Language

eng

Publisher

Northern Illinois University

Rights Statement

In Copyright

Rights Statement 2

NIU theses are protected by copyright. They may be viewed from Huskie Commons for any purpose, but reproduction or distribution in any format is prohibited without the written permission of the authors.

Alt Title

Restructuring Charges: Are They An Abuse of Accounting Theory?

Media Type

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