Advantages of Fund Accounting in ‘Nonprofits’

The financial worries of New York City in the early 1970s began registering in the bond market in October 1974, when the city first encountered difficulty selling its securities. These problems reached a crisis stage in 1976, and it was not until then that the bond rating services reduced the city’s bond rating. In this […]

by

Regina E. Herzlinger

and

H. David Sherman

by

Regina E. Herzlinger

and

H. David Sherman

From the Magazine (July 1980)

The financial worries of New York City in the early 1970s began registering in the bond market in October 1974, when the city first encountered difficulty selling its securities. These problems reached a crisis stage in 1976, and it was not until then that the bond rating services reduced the city’s bond rating. In this and other cases, the bond rating did not anticipate the crisis but underwent adjustment only after the reality had become evident.

A version of this article appeared in the July 1980 issue of Harvard Business Review.

RH

Regina E. Herzlinger is the Nancy R. McPherson Professor of Business Administration at Harvard Business School.
H. David Sherman (h.sherman@neu.edu) is a professor of accounting at Northeastern University’s D’Amore-McKim School of Business and a former fellow at the SEC Division of Corporate Finance. He is a coauthor of “Tread Lightly Through These Accounting Minefields” (HBR July–August 2001).

Advantages of Fund Accounting in ‘Nonprofits’

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