This is a guest post by accounting historian Steve Zeff.  The title is mine, though.  This article by Steve is recommended for those who want their history lesson extended– RJB

There has been some discussion of “matching” and the income statement v. balance sheet approaches. Jeff Wilks wrote, “I’d just love to see someone explain what an income statement approach is.” All one has to do is read Paton and Littleton’s famous 1940 AAA monograph, An Introduction to Corporate Accounting Standards, which is the classic statement of the income statement “matching” approach. This monograph has been widely used in college accounting courses since then, and it still in print.

An early articulate statement of what is today known as the balance sheet approach was Robert Sprouse’s October 1966 Journal of Accountancy article, “Accounting for What-You-May-Call-Its,” and as a charter member of the FASB he was the intellectual leader of the movement to adopt the balance sheet approach. Also see his “The Balance Sheet–The Embodiment of the Most Fundamental Elements of Accounting Theory,” in the proceedings entitled Foundations of Accounting Theory, Edited by Williard E. Stone (University of Florida Press, 1971).

The “true and fair” override was broached in a Round Table last month. The override originated in Great Britain many decades ago and was exported to a number of British Commonwealth countries (but not used in Canada and Australia), and in 1997 it became enshrined as the “fair presentation” override in IAS 1. Christopher Nobes and David Alexander, two British accounting academics, have written numerous articles on the meaning and purport of the override, and any discussion of the subject.should begin with their writings. They have been published mostly in British accounting journals, in Abacus, and in The European Accounting Review, and a number of articles on the override were published in 1994 by Routledge in a hardbound collection (An International View of True and Fair Accounting, by R.H. Parker and Nobes).