Jim Oleson

Date of Award


Document Type

Independent Study

Degree Name

Master of Science (MS)


The term "pooling of interests" was first used by the AI CPA in a report issued in 1945 by the Committee on Public Utility Accounting. Since that time, the pooling of interests concept went through much debated change and revision

The Accounting Principles Board issued their first opinion on pooling of interests in Accounting Research Bulletin Forty. This bulletin was followed by three more. During this time the criteria proposed in these bulletins as a basis for classifying a business combination as a pooling of interests were being constantly modified. Many of the changes began to liberalize the accounting treatment of a business combination. It finally reached the point where many of the guidelines set down by the AICPA were being ignored in actual practice. After reviewing the situation the Accounting Principles Board decided there was a definite need to clarify the distinction between a pooling of interests and a purchase. Finally, in 1970 the Board issued Opinion Sixteen

This paper will review the pronouncements issued by the Accounting Principles Board concerning pooling from 195 O to the issuance of Opinion Sixteen. It will also analyze the change in application of pooling and the environment of pooling from 1950 to the present. Finally, it will discuss the need for and the recommendations of Opinion Sixteen issued in October, 1970