In my previous post, I expressed my opposition to the FASB’s proposal for replacing the LOCOM rule for inventory with “lower of cost or net realizable value.”
I stated that the extant U.S. GAAP on LOCOM embodied a principle of measuring the economic utility of an asset that exists nowhere else. It is worth preserving, if for no other reason, than to show students of accounting and business that bridges between financial reporting and economics can indeed be construct. As the last one is being blasted to smithereens, it’s legitimate to ask why there aren’t more such bridges.
But, I was surprised when my post led to this comment by a former FASB member, whom I respect greatly and choose not to name:
“Unlike Tom who believes this is an assault on users’ information needs, I think this is a ho hum matter. The answers are not likely to differ greatly [Read More...]