I apologize for the long interval between this and my last posting – especially to those of you who have privately thanked me for material just boring enough, and long enough, to induce a good night's sleep. Tax blogs, I am told, are much too potent unless one is planning' [...]
This is the first of a series to discuss the results of our IFRS opinion survey. The idea for a survey originated with yours truly, and I was moved to do so (more like propellled with outrage) by the ersatz pro-IFRS "research" coming out of the Big Four and the AICPA propaganda [...]
Haven't Taken Our IFRS Opinion Survey?
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Click here to answer 12 brief questions.
My previous post lambasted the FASB for shilling the SEC's whacky proposal to measure the year-end value of oil and gas reserves at average prices for the year – instead of the year-end price. Since then, [...]
Please Take Our IFRS Opinion Survey!Â
Click here to answer 12 brief questions.
Before I discuss the sordid details of a recent FASB proposal, please take a moment to read this hypothetical:Â
What if the FASB were to issue a proposal to require companies holding marketable equity securities of oil companies [...]
This is a brief announcement of an online IFRS survey that I have prepared with Pat Walters of Fordham University.Â
I invited Pat to collaborate with me because we have divergent views on the questions being asked.  Thus, I hope that together we have achieved a modicum of balance in the survey's' [...]
Section 404(a) of the Sarbanes-Oxley Act, together with SEC rules implementing the provisions of the Act, require management to assess and report on the effectiveness of internal control over financial reporting (ICFR). It took a few years for the SEC to phase everybody in, but all public companies, large and [...]
Given my public record of opposition to IFRS adoption, you might be surprised to know that I have taught courses on IFRS for over ten years, beginning in Switzerland and the UK. If anybody is interested, I will be presenting a two-day IFRS/GAAP comparison courses in Chicago and Vegas this [...]
It came as no surprise that SEC Chief Accountant James Kroeker's first public foray, since Mary Schapiro deigned to remove "Acting" from his title, was to announce that the IFRS Roadmap has once again become a priority at the SEC. That should please his former employer, Deloitte, one of the' [...]
In this post, I'll be reviewing two comment letters submitted to the FASB in response to its Discussion Paper (DP) on lease accounting* by the Investors Technical Advisory Committee (ITAC) of the FASB, and the CFA Institute Centre for Financial Market Integrity (CFA).  My original comments are
I have already reported stumbling upon a fascinating interview of Clarence Sampson, SEC Chief Accountant for more than a decade starting in the mid-1970s. Of his many tales of peculiar interactions with special interests, this one struck me right in one of my biggest pet peeves:
"In the" [...]
Continuing my previous post, here's reasons 6 – 10 with my responses.
6. There are also hedge accounting considerations. Paragraph 79 of IAS 39 does not allow interest rate risk hedge accounting for HTM securities. Paragraph 21(d) of FAS 133 similarly precludes hedge accounting treatment for interest rate risk' [...]
In my previous post, I argued that the FASB should require accounting for investments in loans at inflation-adjusted replacement cost. I have not been flooded with reactions from readers, but I did ignite a lively discussion on the AECM listserv, composed mainly of academics, and which included a [...]
One of the most positive financial reporting policy developments in a long time is the FASB's announcement, about a month ago, of its intent to require fair value accounting for nearly all financial instruments. An exposure draft is supposed to be coming out pretty soon, but that will mark' [...]
My practice has been to post about once per week, and I had completed my latest less than a day ago. I'm coming back at you so quickly, because Bloomberg News has just come out with this:
"Securities and Exchange Commission Chairman Mary Schapiro settled on two finalists to be'" [...]
A couple of commenters on the last post found fault with my assertion that the "low" response from issuers on the SEC's IFRS Roadmap proposal is pretty much a non-issue. For example, commenter Andy argues that self-selection bias may well exist because only "... those who feel strongly against'" [...]
There are some definite signs that Mary Schapiro is getting closer to naming her Chief Accountant. For example, I received an email from Denny Beresford, former FASB chair, who was left with the impression from a reporter that an announcement would be coming this week. Indeed, because of recent events I'll be' [...]
"Converge" from Merriam-Webster's Online Dictionary:
to tend or move toward one point or another: come together: meet
to come together and unite in a common interest or focus
to approach a limit as the number of terms increases without limit
Now that it has become abundantly clear that convergence of' [...]
I can usually find enough time to write only one post each week. Consequently, much of what I considered to be high-quality fodder is washed away by the exigencies of my real work. This week, however, had too many interesting news items, and I can't let them go without at least something' [...]
In a recent post on business combinations accounting that is related to SAB 112, I criticized the FASB for creating yet another loophole in business combinations accounting that make M&A transactions more attractive than they really should be. To recap, I described how JP Morgan wrote down toxic loans acquired from WaMu so [...]
I received an email from the source I previously dubbed Debit Throat, providing some interesting reactions to my previous post on handicapping the chief accountant 'contest.'
"I agree [with your odds] – I don't think that Neimeier is [no longer] a possibility (although my choice also) for CA. Frankly'" [...]
A BNA news article [available by subscription only] reported last week that anonymous sources say that Mary Schapiro has narrowed the candidates for SEC Chief Accountant to five finalists:Â
"Jane Adams, a former deputy chief accountant of the SEC and former longtime staff member of the Financial Accounting Standards Board," [...]
From a MoneyNews.com story published this Wednesday headlined "Banks Stand to Reap Billions from Purchased Bad Loans," came an account of a jaw-dropping transaction. It was spawned by FAS 141(R), the latest and greatest standard on accounting for business combinations:
"When JPMorgan bought WaMu out of receivership last September," [...]
In responding to my previous post on contingent liabilities, a few of my kind and sensitive readers raised the following points:
Why should there be a difference in the accounting for a law requiring sellers to compensate their customers for defective products, and an express warranty to the exact [...]
What the FASB calls "contingent liabilities" in FAS 5, the IASB terms "provisions" in IAS 37. I prefer the IASB's language, because of its pejorative ring to my American ears: it more clearly connotes the virtually unchecked discretion issuers have abused to obfuscate liabilities and trends in earnings.
In a' [...]
The European Commission sponsored a two-day conference last week entitled "Financial Reporting in a Changing World." I was not invited to speak (J), but if I had been, this is what I would have said: Let's not use this 'changing world' stuff as an excuse to make more silly rules!' [...]
The comment period has ended on the IASB and FASB's joint discussion paper (DP), Preliminary Views on Financial Statement Presentation, and it looks like there's going to be a rumble between investor advocates and issuer special interests. I have written three posts in the last few months on this [...]
In my previous post, I let 'er rip at the IASB/FASB "preliminary views" on measuring lease contract assets and liabilities. A close second on my list of investor-unfriendliness contained in their joint lease accounting Discussion Paper is the proposal that lease options (e.g., renewal, purchase,' [...]
A couple of weeks ago, the FASB and IASB jointly published a discussion paper (DP) entitled Leases: Preliminary Views. I take no pleasure in saying that SFAS 13 is the oldest worst accounting standard currently living and breathing; and the DP is a wet blanket on my hopes that [...]
In the public FASB meeting on Tuesday, one of the topics was revenue recognition under circumstances where the consideration received is other than cash. The Board discussed how to value the consideration received, and I am told that a majority of the Board favored fair (exit) value.
HOWEVER, Chair Bob [...]
"It's painful now to read a lecture that Mr. [Lawrence] Summers [who is currently President Obama's principle economic adviser as chair of the NEC] gave in early 2000, as the economic crisis of the 1990s was winding down. Discussing the causes of that crisis, Mr. Summers pointed to things that" [...]
The New York State Society of Certified Public Accountants (Society) seems to have become the first group of professional accountants to break with the AICPA's big push to get the SEC to throw out U.S. GAAP and adopt IFRS. The Society's comment letter responding to the IFRS roadmap proposal expressed [...]
The congressional hearings on "market-to-market accounting" are scheduled to begin in a few hours. I shudder at the prospect of financially-illiterate congressmen becoming putty in the hands of savvy lobbyists bearing gifts.
My concern was piqued by Steve Forbes' latest error-filled epistle sans data, which the Wall Street Journal' [...]
As I was researching a question for a client a couple of weeks ago, I happened upon a love child of two of my pet peeve accounting standards:
FAS 115 (marketable securities) – especially the part permitting available-for-sale (AFS) classification;
FAS 52 (foreign currency translation) – practically every word of it [...]
I recently found this quote from H. G. Wells, the English novelist and historian, in the introduction to the "Mike Gravel edition" of the Pentagon Papers:
"The true strength of rules and empires lies not in armies or emotion, but in the belief of men that they are inflexibly open" [...]
Ever since I read Malcom Gladwell's acclaimed new book, Outliers: The Story of Success, I have been thinking about its many policy implications. The main message of the book is that highly successful people owe much more than one would expect to happenstance: e.g., where you are from,' [...]
Since my previous post on the FASB's 3 - 2 vote to finalize the investor-indifferent FSP EITF 99-20-1, I have received a number of comments regarding the extent to which board size and composition have affected financial reporting standards.
Alpha Opens
A seasoned investor professional, who chooses to remain anonymous' [...]
Do you think that stable funding could allow the IASB to divorce itself from the influence of the EU? If so, consider the example the FASB is setting under similar circumstances, and think again.
The U.S. standard setter was granted its own legal separation papers from special interests six years [...]
Following my most recent post on financial statement presentation, Eddie Thomas, a frequent commenter of this blog, wrote: "Wouldn't investors be better off pushing for a more robust XBRL so that they can make their own decisions about what is relevant information and what is not? It seems like'" [...]
Two readers, including Robert Bloomfield, Cornell accounting professor (my alma mater!) and Director of the Financial Accounting Standards Research Initiative (FASRI) of the FASB, were kind enough to point out an error in my previous post. Here is the gist of what Prof. Bloomfield had to say (his full [...]
This past October, the FASB and IASB issued a joint discussion paper with their preliminary views on financial statement presentation:
"[The IASB and FASB initiated the joint project on financial statement presentation to address users' concerns that existing requirements permit too many alternative types of presentation and that information'" [...]
"The London Symphony played Beethoven last evening, and Beethoven lost." That quotation, which my father attributed to George Bernard Shaw, leapt into my mind as I read Marie Leone's CFO.com report of remarks made by Thomas Jones, vice chairman of the IASB:
"… in general, he [Jones] and other'" [...]
The trustees of the IASC Foundation (the oversight body of the IASB) have continued to blithely plug IFRS as if it were just an innocent bystander in the global financial crisis. Just days before the G-20 economic conference, the IASC Foundation sent a letter to President Bush, urging that [...]
Although its record is far from spotless, the FASB has been very slowly digging itself out of the hole where what's good for issuers ought to be good enough for investors. There have been plenty of frustrating and value-destroying political compromises along the way, but I can't think of a [...]
As I mentioned in a previous post, PCAOB member Charles Niemeier delivered a tour de force critique of U.S. efforts to adopt IFRS, at a recent New York State Society of CPAs (NYSSCPA) educational event. To its credit, the NYSSCPA's e-zine covered Niemeier's remarks a few days later. On [...]
Last Thursday, a new reader (who prefers to remain anonymous) wrote:
"Have you considered addressing the hotly debated issue of how assets sold into the TARP [Troubled Asset Relief Program] will be accounted for by banks, and whether the prices [offered by the government] should be considered market prices for" [...]
While most politicians in Washington were trying to figure out how to solve the current financial crisis with real cash, my congressman*, John Shadegg (Rep. - Arizona), and a few of his colleagues have been fiddling with accounting rules while Rome burns. Flying in the face of the vast majority of investors, the [...]
A member of the AECM listserv reported that today's episode of "60 Minutes" explained that a credit default swap (CDS) "was actually an insurance instrument, and perhaps fraudulently sold as [a] financial instrument to avoid insurance regulations and insurance regulators." It is hard for me to challenge that assertion, [...]
