Context: Oral History
Format: Video

John C. Burton and Robert T. Sprouse Parts 1-3

Date: March 26, 1976

Attribution: Courtesy of the Academy of Accounting Historians, University of Mississippi

Interviewed By: Stephen A. Zeff

John C. Burton (“Sandy” Burton) served as chief accountant of the SEC from 1972 to 1976 where he played a key role in advocating for transparency and higher standards in financial reporting. From 1962 to 1972, Mr. Burton was a faculty member and dean of Columbia Business School. Robert T. Sprouse is a founding member and current vice chairman of the Financial Accounting Standards Board (FASB) and was a former president of the American Accounting Association from 1972 to 1973. This oral history has three videos which are described below.

PART I

Mr. Burton and Mr. Sprouse discuss the objectives of financial statements, contrasting historical cost, current value, and general price level (GPL) accounting. They debate which measurement best serves users, especially investors, and explore the roles of replacement cost, net realizable value, and present value in financial reporting.

PART 2

The conversation addresses the practical challenges of applying replacement cost and exit price accounting, the relevance of these measures for going concerns versus liquidating entities, and the limitations of footnote disclosures. They also debate the treatment of holding gains and the segmented presentation of income.

PART 3

The interviewers examine the feasibility and usefulness of replacement cost and GPL accounting, the need for experimentation, and the importance of clear communication in financial statements. The discussion also covers the pros and cons of general price level adjustments and the treatment of purchasing power gains on long-term debt.