The Regulatory History Of Business Combinations

Abstract

This paper examines the legal and accounting history of business combinations. The economic development of guidelines governing current combinations is traced through legislation, court precedents, political events, recording methods, and accounting pronouncements. This examination indicates that the consistently applied accounting principles have been the only unchanged environmental factor during the current round of business combinations. Although the accuracy of the accounting principles in describing economic events cannot be claimed as a harbinger of merger activity, the consistency of those rules would seem, at least, to be a stimulant to merger activity.