RT Journal Article
SR Electronic
T1 Accounting for Uncertainty
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 31
OP 39
DO 10.3905/jpm.2002.319861
VO 29
IS 1
A1 Sam Savage
A1 Marc Van Allen
YR 2002
UL https://pm-research.com/content/29/1/31.abstract
AB The recent crisis of confidence in the accounting industry has raised issues about the need for reform. In one area the timing and technology are right today for significantly different accounting rules—particularly rules that govern the treatment of uncertainty in financial statements. Discussed here are some basic misconceptions about uncertainty that are actually sanctioned by current accounting practice. A variety of analytical tools are available to improve representation of uncertainty for firms. The authors address some of the legal consequences of relying on accepted but flawed accounting standards, and point to a possible path to reform of accounting practice.