University of Mississippi eGrove American Institute of Certified Public Accountants Accounting Trends and Techniques (AICPA) Historical Collection 1951 Accounting trends and techniques, 5th annual survey, 1951 edition American Institute of Accountants Follow this and additional works at: https://egrove.olemiss.edu/aicpa_att Part of the Accounting Commons, and the Taxation Commons Recommended Citation American Institute of Accountants, "Accounting trends and techniques, 5th annual survey, 1951 edition" (1951). Accounting Trends and Techniques. 52. https://egrove.olemiss.edu/aicpa_att/52 This Book is brought to you for free and open access by the American Institute of Certified Public Accountants (AICPA) Historical Collection at eGrove. It has been accepted for inclusion in Accounting Trends and Techniques by an authorized administrator of eGrove. For more information, please contact [email protected]. 1951 EDITION Accounting Trends & Techniques IN PUBLISHED CORPORATE ANNUAL REPORTS 5th ANNUAL SURVEY Of Corporate Annual Reports By the Research Department of the American Institute of Accountants AMERICAN INSTITUTE OF ACCOUNTANTS 270 Madison Avenue • New York 16, N. Y. Accounting Trends and Techniques IN PUBLISHED CORPORATE ANNUAL REPORTS • 1951 EDITION FIFTH ANNUAL CUMULATIVE SURVEY of the accounting aspects of 525 corporate annual re­ ports, to which are added excerpts from and comments upon unusual accounting treatments found in six hundred additional reports. The reports analyzed are those with fiscal years ending May 1, 1950 to April 30, 1951 AMERICAN INSTITUTE OF ACCOUNTANTS 2 7 0 Madison Avenue • New York 16, N. Y. Copyright 1951 American Institute of Accountants ★ $10 Per Copy Introduction A ccounting Trends and Techniques in P ublished Corporate An­ nual Reports—1951 is based upon a survey of the annual reports of 525 companies with fiscal years ending May 1, 1950 to April 30, 1951. The 1951 survey is the fifth in a series of such studies carried out by the research department of the American Institute of Account­ ants based upon a long-range program initiated by the Council in 1946 for the analysis of corporate reports. T he 525 companies whose annual reports are included in the 1951 survey represent over 25 varied industries and these reports are accompanied by certificates from 74 different accounting firms. The companies in the current survey are the same as those analyzed in prior years, except that substitutions have been made whenever necessitated by the merger or dissolution of any of the included companies. Approximately 600 additional reports were informally reviewed and are referred to, whenever appropriate, throughout the study. S ignificant accounting trends as reflected in the annual reports for the past five years are disclosed and pointed up in numerous of the comparative tabulations included in the study. In general, the tabulations in the current survey have been modified and simplified so as to display more effectively the data contained therein. Accounting techniques have been more fully disclosed in the 1951 study by the use of numerous direct quotations from various of the 525 reports and the inclusion of a great number of useful illustrative examples taken directly from the reports. As in the case of the prior years’ surveys, the 1951 study gives special attention to matters recently under consideration by the committee on accounting procedure of the American Institute of Accountants. I n the various tabulations and elsewhere throughout the study refer­ ence is constantly made, by company number, to the various 525 reports which are illus­ trative of the matters under discussion. A list of the 525 companies whose reports are included in the survey is set forth in the appendix, with the number of each company shown for ready reference. Carman G. Blough, Director of Research American Institute of Accountants Table of Contents Section I: Certified Financial Statements Page Customary Financial Statements................................................................................................... 7 Additional Financial Statements.................................................................................................... 8 Comparative Presentation.............................................................................................................. 11 Form of Balance Sheet................................................................................. 13 Terminology in the Balance Sheet........................................................................ 13 Title........................................................................................ 13 Uncollectible Accounts................................................................................................................ 14 Depreciation................................................................. 15 Federal Income Tax..................................................................................................................... 16 Stockholders’ Equity................................................................................................................... 17 Retained Earnings......................................................................... 17 Capital Surplus............................................................................................................................ 19 Form of Income Statements........................................................................................................... 20 Terminology in Income Statement Titles....................................................... 20 Consolidation of Subsidiaries.......................................................................................................... 21 Domestic Subsidiaries.................................................................................................................. 21 Foreign Subsidiaries..................................................................................................................... 22 Uncertified Financial Statements................................................................................................... 28 Section II: Balance Sheet Current Assets—Interesting Items................................................................................................. 29 Marketable Securities—Basis of Valuation.................................................................................... 31 Inventories....................................................................................................................................... 31 Basis of Pricing............................................................................................................................ 32 Cost Determination..................................................................................................................... 36 Last-In, First-Out........................................................................................................................ 37 Lifo Costing by Industrial Groups............................................................................................. 40 Inventory Reserves........................................................................... 41 Property—Basis of Valuation.......................................................... 44 Non-Current Assets—Interesting Items........................................................................................ 46 Disclosure of Long-Term Leases.................................................................................................... 49 Cash Surrender Value of Life Insurance........................................................................................ 52 Claims for Refund of Taxes............................................................................. 52 Intangible Assets............................................................................................................................. 54 Prepaid Expenses and Deferred Charges....................................................................................... 56 Defense Contracts—Renegotiation and Price Redetermination.................................................. 57 Unconsolidated Subsidiaries—Valuation Basis............................................................................. 59 Current Liabilities—Interesting Items.......................................................................................... 66 Deferred Charges and Non-Current Liabilities............................................................................. 69 Reserves Shown Below Current Liabilities.................................................................................... 70 Capital Stock................................................................................................................................... 84 Treasury Stock................................................................................................................................. 86 Stock Options and Stock Purchase Plans...................................................................................... 88 Contingent Liabilities...................................................................................................................... 92 Post-Balance Sheet Disclosures...................................................................................................... 94 Section III: Income Statement Page Sales or Revenues—How Stated.......................................................