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Statement on Auditing Standards Issued by the Auditing Standards Executive Committee Al American Institute of Certified Public Accountants Unaudited Replacement Cost Information Replacement Cost Information Required in Filings With the Securities and Exchange Commission 1. Although generally accepted accounting principles do not require the presentation of replacement cost information in financial statements, certain companies are required by Regulation S- X of the Securities and Exchange Commission ( the Commission) to include specified replacement cost information in a note or a separate section of audited financial statements filed with the Commission. Companies supplying such information are to disclose the methods used in determining the amounts and are to furnish any additional information necessary, in the opinion of management, to prevent the information from being misleading. 2. The replacement cost information ordinarily is developed by management, using assumptions and techniques that have not yet been standardized, and consequently may differ from company to company and from year to year. Accordingly, the various approaches to calculating the replacement cost information must be viewed as experimental at the present time. 3. The Commission does not require that the replacement cost information be audited but has urged that appropriate standards be developed concerning the involvement of the auditor. This State- Copyright © 1977 by the American Institute of Certified Public Accountants, Inc. 1211 Avenue of the Americas, New York, N. Y. 10036 May 1977 18