IN SEARCH OF ELDORADO.

The article comments on the effort of the U.S. Financial Accounting Standards Board (FASB) to solve problems on accounting standards. Modern business transactions are complicated, and it follows that accounting standards designed to record and report those transactions also will be complicated. The use of what is known as the liability method seemed to many practitioners to be simpler and more easily understood. The FASB did revise the way businesses should account for income taxes. However, the result was a standard that was far more complicated than its predecessor and certainly more difficult to understand, implement and explain. It is so difficult to apply that its effective date has been postponed twice by the FASB. Implementation difficulties have been experienced by both small and large companies. To recognize the obligation for post-retirement benefits based on current cost levels adjusted annually will provide financial statement users with the information they need. It will be more comparable from company to company and less susceptible to manipulation.