Summary of the FASB's Objectives
... it is not fair to say one firm is worth less because of the method they chose to depreciate their assets. In addition, it was noted that when each firm used the same method, the differences among the price-earnings disappeared. The article then went on to state some of the implications regarding the evidence found. One of the implications that were noted consists of the fact that companies should not be held responsible for using the “wrong” method; however, it must be properly disclosed. Another implication was that some of the less-experienced investors would find it hard to analyze a company in which does not fully disclose every detail. A third implication that was noted was that accountants have to stop acting as if they are the only source of information regarding a firm since investors can now go elsewhere to get the information. However, in order for investors to find information elsewhere, the FASB would most likely have to reduce the cost of providing information to investors....