Back in the late 1990s, this column criticized those who supported pooling-of-interests accounting for business combinations. We called it "pfooling" because it was designed to trick the capital markets into believing false financial statements.Eventually, the Financial Accounting Standards Board did eliminate pooling, although it was unwilling or unable to do anything about the misleading information produced by past poolings through retroactive application. Those bad numbers will hang around for decades, making the affected statements much less useful.

With the apparent direction of the new Conceptual Framework, a new day is coming in which the guiding force will be the usefulness of reported information for anticipating future cash flows, not its preparation ease or its ability to make managers look good.

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