T HE measurement of earnings has been of continuing concern to accountants and to users of accounting data. Because there is an unlimited number of reporting methods and because the process of data collection, storage, reporting, and analysis is not a costless activity, the relative merit of alternative income measurement rules is a topic of importance to accounting research. This paper presents some preliminary findings regarding the observed association between security prices and alternative income numbers, where the primary focus is upon the issue of interperiod tax allocation. The interperiod tax allocation controversy is an attractive research topic for several reasons. (1) It is virtually impossible to resolve the controversy with traditional sorts of arguments.1 This is also true of many other measurement controversies in accounting, and it is particuarly obvious here. (2) The controversy affects a large number of firms. Many other controversies tend to be of concern in only a few industries (e.g., research and development, advertising and long-term leases), while most firms have a deferred tax account. (3) Although deferral is required (APB Opinion No. 11), nondeferral income can be easily estimated from the financial statements. Such an adjustment would be extremely difficult and/or costly in other controversies (e.g., LIFO versus FIFO). Hence, the issue of differences in visibility among alternative measures is not nearly as serious here as it is for some measurement issues. The association between the alternative