On January 26, 1983, the Interstate Commerce Commission (ICC) announced that it would require all railroads under its regulatory jurisdiction to change from Retirement-Replacement-Betterment (RRB) accounting, to a more theoretically sound depreciation accounting for matching revenues and expenses. The change was needed because RRB did not allow for the recapture of track investment, leaving the railroads with limited capital to replace aging track lines. Over the previous three decades, it had become painfully obvious to everyone that the industry's economic woes were the result of archaic accounting procedures that lacked harmony with the rest of American accounting standards, but the ICC was reluctant to change until new tax legislation in the early 1980s forced the issue. The decision was a culmination of a debate that started in the mid-1950s when Arthur Andersen, with the help of the securities industry, began an effort to harmonize railroad and industry standards using arguments that mirror those supporting the international accounting harmonization efforts of the early 21st century.
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1 June 2007
Research Article|
June 01 2007
THE END OF BETTERMENT ACCOUNTING: A STUDY OF THE ECONOMIC, PROFESSIONAL, AND REGULATORY FACTORS THAT FOSTERED STANDARDS CONVERGENCE IN THE U.S. RAILROAD INDUSTRY, 1955–1983
A. Lee Gurley
A. Lee Gurley
AUBURN UNIVERSITY, MONTGOMERY
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Online ISSN: 2327-4468
Print ISSN: 0148-4184
© 2007 American Accounting Association
2007
Accounting Historians Journal (2007) 34 (1): 25–55.
Citation
Jan R. Heier, A. Lee Gurley; THE END OF BETTERMENT ACCOUNTING: A STUDY OF THE ECONOMIC, PROFESSIONAL, AND REGULATORY FACTORS THAT FOSTERED STANDARDS CONVERGENCE IN THE U.S. RAILROAD INDUSTRY, 1955–1983. Accounting Historians Journal 1 June 2007; 34 (1): 25–55. https://doi.org/10.2308/0148-4184.34.1.25
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