Peeling away financial reporting issues one layer at a time

On Golden’s Con — and Bain Capital’s Travels to Lilliput

There is so much I would like to write about, yet so little time…

I could write about the latest half measure on the accounting for repurchase agreements (ASU 2014-11)— and that Tom Linsmeier’s [Read More...]

On Golden’s Con: Selling False Hope for Fundamental Changes to Financial Reporting

“FASB is preparing to consider foundational changes that could significantly alter financial reporting in the future as well as standards improvements that will reduce complexity, board Chairman Russell Golden said … in a speech at [Read More...]

The Wild West of “Nonauthoritative” GAAP

Two posts ago, I provided two reasons for the PCAOB* to take the opportunity of its auditor’s report project to look closely at the meaning of, “fairly presented … in accordance with [Read More...]

High Frequency Trading: What Would Cicero Say?

This post is a little different from my posts on accounting issues.  I’m going to weigh in on the high frequency trading (HFT) brouhaha that was ignited by the recent 60 Minutes report [Read More...]

Look Beyond the Firms for the Root Causes of Audit Deficiencies*

The International forum of Independent Audit Regulators (IFIAR) has published its second annual survey of audit inspections of the Big Four plus BDO and Grant Thornton firms around the world:

“The leading areas of [Read More...]

One Shouldn’t Have to be an Auditor to Understand an Audit Report

The PCAOB* has proposed a new standard to make the auditor’s report more informative.  If finalized in its present form, it would provide more and/or better information concerning the following:

Critical audit matters (as determined [Read More...]

Accounting Complexity: What if “Truth in Labeling” were an Accounting Principle?

“I do not deny that what happened to us is a thing worth laughing at. But it is not worth telling, for not everyone is sufficiently intelligent to be able to see things from [Read More...]

Is XBRL the Future of Financial Reporting? (YES!)

For many of the financial reporting questions of the day, the right way forward is self-evident and direct. “Build it and they will come,” I say.

But far too often, policy makers allow themselves to [Read More...]

“Reducing Complexity” — The Latest Red Herring from the FASB

I don’t have exact figures, but I’m fairly certain that the AICPA’s annual Washington, DC conference on SEC-related developments may be the place where you can find the highest number of accountants crammed [Read More...]

My Safest Prediction for 2014: New Revenue Recognition Rules that Nobody Wants

We have thankfully come to the end of a year in which the gratuitous and repeated attempts by the FASB to converge U.S. GAAP with IFRS have finally devolved from “inevitable” to ignominy. [Read More...]

It’s Time to Change the Wacky Accounting for Stock Issuance Costs (Revised)

Note:  Some very helpful comments on my most recent post have led me to conclude that I made some factual and logical errors.  Fortunately, though, my main message, that stock issuance costs should be recorded [Read More...]

The CFA Institute Survey on Loan Accounting Needed to Go Deeper

(See a correction at the end of this post.)

The CFA Institute has recently published a report that summarizes the findings of its member survey on the FASB and IASB’s proposals for recognition and [Read More...]

The EBITDA Epidemic Takes Its Cue from Standard Setters

On October 4th, Jon Weil published “An Accounting Lesson for Twitter.”  Here’s how it starts:

Whether he prevails at his insider-trading trial or winds up paying a fine to the Securities and Exchange Commission, [Read More...]

The Big Revenue Recognition Fizzle

“The new, converged revenue recognition standard will include substantially less industry-specific, “bright-line” guidance than many U.S. companies are accustomed to.” [italics added]

That understatement is brought to you by the Journal of Accountancy.  It’s the [Read More...]

Hank Paulson Says Another Financial Crisis is Inevitable: The FASB is Working to Prove Him Right

Hank Paulson, former Treasury Secretary, recently gave an interview to Marketplace host Kai Ryssdal to mark the fifth anniversary of the Lehman Brothers bankruptcy.  More to the point, Mr. Paulson said that he decided [Read More...]