Issued by the Committee on Accounting Procedure American Institute of Certified Public Accountants 270 Madison Avenue, New York 16. N. Y.
February, 1956 No. 46
Discontinuance of Dating Earned Surplus
1. Paragraph 10 of Chapter 7(a), Quasi-Reorganization or Cor-porate Readjustment, of Accounting Research Bulletin No. 43, Restatement and Revision of Accounting Research Bulletins, as follows:
After such a readjustment earned surplus previously accumulated cannot properly be carried forward under that title. A new earned surplus account should be established, dated to show that it runs from the effective date of the readjustment, and this dating should be disclosed in financial statements until such time as the effective date is no longer deemed to possess any special significance.
2. The committee believes that the dating of earned surplus fol-lowing a quasi-reorganization would rarely, if ever, be of significance after a period of ten years. It also believes that there may be excep-tional circumstances in which the discontinuance of the dating of earned surplus could be justified at the conclusion of a period less than ten years.
The statement entitled "Discontinuance of Dating Earned Surplus" was adopted by the assenting votes