The SEC Rules Historical Cost Accounting: 1934 to the 1970s

Abstract:     
From its founding in 1934 until the early 1970s, the SEC and especially its Chief Accountant disapproved of most upward revaluations in property, plant and equipment as well as depreciation charges based on such revaluations. This article is a historical study of the evolution of the SEC's policy on such upward revaluations. It includes episodes when the private-sector body that established accounting principles sought to gain a degree of acceptance for them and was usually rebuffed. In the decade of the 1970s, the SEC altered its policy. Throughout the article, the author endeavors to explain the factors that influenced the positions taken by the parties.

Number of Pages in PDF File: 24

Keywords: SEC, historical cost, current cost, revaluations

JEL Classification: M41, M44, G38, N42

working papers series