Income Reporting by Conglomerates—Views of American Businessman.

This article presents the views of U.S. businessmen to the income reporting preparation of conglomerates. In recent decades mergers in the U.S. have resulted in creation of multi-market or multi-industry corporations. Such entities are loosely called conglomerates. This type of business organization has emerged chiefly as a result of acquisition and merger as opposed to expansion through internal development. The conglomerate enterprise has been defined as one that sells commodities and services bearing no functional relationship to one another. That is, they are neither produced from a common raw material nor by the same equipment or technology. Further, the commodities and services are not sold through the same market channels or to the same customers or for the same end uses. Thus, conglomerates show no internal coherence of activity or function. Since products of a wholly incoherent conglomerate bear no logical relationship to one another, their sole obvious connection is that they are offered by the same firm. It has been alleged that failure of the conglomerate to issue separate income statements for its diversified economic activities results in disappearance of financial data about the industry in which the absorbed company operates.