The Primary Historical Reason for the FASB Reversing Its Positions

question 110

Multiple Choice

The primary historical reason for the FASB reversing its positions when political pressures occur is:

• A)The cost of gathering data was prohibitive.
• B)The difficulties in measurement were too great.
• C)They have no authority in such situations.
• D)The SEC did not support the FASB position.

---

Definitions:

Average Operating Assets

Average operating assets are the mean value of the resources employed in a company's operations over a certain period, used to evaluate the efficiency of asset use in generating revenue.

Residual Income

The amount of income that an individual or company retains after all operating expenses and charges, including cost of capital, have been deducted.

Minimum Required Rate

The lowest acceptable rate of return on an investment that a manager or investor specifies, considering the project's risk level.

Investment Opportunity

A financial investment or venture with the potential for yielding returns, involving the allocation of resources with the expectation of future financial gains.