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27 Antitrust Bull. 161 (1982)
Accounting Numbers and Economic Values

handle is hein.journals/antibull27 and id is 163 raw text is: The Antitrust Bulletin/Spring 1982 Accounting numbers and economic values BY GEORGE J. BENSTON* The accounting data produced by companies, either for internal managerial purposes or for published financial statements, have often been presented in legal cases involving antitrust issues or other economic questions. Unfortunately, many lawyers and economists seem unaware of the inherent limitations of numbers produced by a company's accounting system. These limitations are so severe that, in general, these data do not provide valid measurements that can be used for answering or gaining insights into most economic questions. In the paragraphs that follow, I give my reasons for this conclusion and provide illustrative examples. I can summarize the reasoning, as follows. The economic concepts of assets, liabili- ties, income and expense necessarily are subjectively determined. Accounting, however, is concerned primarily with recording data to meet the requirements and peculiarities of specific business organization and managers. Their familiarity with the business * Professor of Accounting, Economics and Finance in the Graduate School of Management, University of Rochester. AUTHOR'S NOTE: An earlier version of this paper was prepared as an affidavit before the Federal Trade Commission in the matter of the Omnibus Automobile Industry Investigation, File No. 761-0083 (Octo- ber 1979), at the request of General Motors Corporation. © 1982 by Federal Legal Publications, Inc.

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