La inmersión en la era del ocio en Europa y EEUU Una comparativa

Prior to the 1960’s, most U.S. firms only reported an income statement and balance sheet as part of their annual accounts, with little or no information about the flow of resources over the period. By the early 1960’s, however, a number of firms had adapted their financial reports to address this problem, evidenced by the growing use of the funds flow statement (Davies et al., 1994). In fact, a random sample of Fortune 500 firms revealed that 39% had reported some form of funds flow statement as part of their annual accounts by 1962 (Donleavy, 1994, page 65). Comparability between different

firms funds flow statements quickly became a problem, however, due to a lack of adequate regulation. Accordingly, in 1961 the American Institute of Certified Public Accountants (AICPA) intervened by initiating the launch of Accounting Research Study No. 2 - “Cash Flow” Analysis and The Funds Statement, in an effort to standardise their disclosure (Savoie, 1965).

Table 2-2 Summary of the development of cash flow reporting in the U.S. Key Date Key Development

1860’s A small number of companies were seen to be using some form of funds flow statement

1950’s Widespread use of various forms of funds flow statements in the U.S.

1963 Issue ofOpinion No. 3 "The statement of Source and Application of Funds"by the APB whereby Funds flow statement disclosure is encouraged but not mandatory

1970 Issue of Securities Exchange Commission (SEC) Release No. 117, which required the mandatory disclosure of a Funds flow statement for all companies filing accounts.

1971 Issue ofOpinion No. 19 “Reporting Changes in Financial Position”by the APB requiring the disclosure of a Funds flow statement for all companies disclosing both an Income

Statement and Balance Sheet as part of their annual accounts 1984 Issue ofStatement of Financial Accounting Concepts (SFAC)

No. 5 “Recognition and Measurement in Financial Statements of Business Enterprises”which saw the inclusion of funds flow statements as an integral part of a company’s annual accounts. 1987 Issue ofStatement of Financial Accounting Standards (SFAS)

No. 95 “Statement of Cash Flows”which superseded APB No. 19, effective for all companies with financial years ending on or after July 1988

Responding to the findings of AICPA in October 1963 the Accounting Principles Board (APB) issued their Opinion No. 3 “The Statement of Source and Application of Funds”,which recommended, but did not mandate, the use of a “Statement of Source and Application of Funds” (SSAF) as a supplementary part of a company’s annual accounts (CFA Institute, 1964, page 14). Industry support for this standard was overwhelming, and by 1967 a random sample of Fortune 500 firms revealed 89% had voluntarily disclosed the SSAF (Donleavy, 1994, page 65) .

Growing acceptance and use of the SSAF, accordingly, motivated the U.S. Securities and Exchange Commission (SEC) to issue their Release No. 117 in 1970, mandating the inclusion of a SSAF for all companies required to file their annual accounts with them (Savoie, 1965). By March 1971, not long after the SEC release, the APB superseded their prior Opinion No. 3, and issued Opinion No. 19 – “Reporting Changes in Financial Position” mandating the disclosure of a renamed “Statement of Changes in Financial Position” (SCFP) for all companies disclosing an income statement and balance sheet as a part of their annual accounts.

Subsequently, however, a number of papers were highly critical of the mandated SCFP as required by APB No. 19. Comments stated that the funds flow statement was confusing, misleading and ambiguous (Holmes, 1976; Taylor, 1979; Han, 1981; Smith, 1985; cited in Donleavy, 1994, page 68). Moreover, the loose definition of “funds” by the standard, which could be either “working capital” or “cash”, was heavily criticised (Spiller and Virgil, 1974; Swanson and Vangermeersch, 1981; Ketz and Kochanek, 1982; Clark, 1983; Bryant, 1984; cited in Donleavy, 1994, page 68).

An empirical study by Spiller and Virgil (1974) continued to find significant differences between the funds flow statements disclosed by their sample of 143 public

firms, mainly due to different interpretations of the requirements of APB No. 19. They concluded that the standard had significant weaknesses in clearly defining one overall purpose of the SCFP. The current purpose of APB No. 19 appeared mixed between reporting flows into and out of a “body of funds” and accounting for the movements in balance sheet accounts. Even the Financial Accounting Standards Board (FASB) acknowledged:

“The lack of clear objectives for the statement of changes in financial position…” (FASB, 1987, paragraph 2)

A subsequent critical review of disclosed funds flow statements performed by Drtina and Largay III (1985) compared the SCFP’s from three listed entities. Their findings further highlighted the significant caveats contained within APB No. 19 whilst at the same time motivating the use of the direct method to report operating cash flows. This method reported gross operating cash flows directly on the face of the cash flow statement, as opposed to the indirect approach, which calculated the net operating cash flow by adjusting the net profit for accruals and non-cash amounts. Drtina and Largay III (1985) demonstrated the direct method more accurately and clearly portrayed the firms operating cash flows, especially since APB No. 19 inadequately defined operations.

While most papers were highly critical of APB No. 19, some did comment positively that the SCFP provided useful information which could improve the accuracy of forecasting cash flows and business failures (Siegel and Simon, 1981; Byrd and Byrd, 1986; Coker, 1986; Gentryet al., 1987; cited in Donleavy, 1994, page 67).