Peeling away financial reporting issues one layer at a time

From Where I Sit, Where Investors Should Stand on the New Lease Accounting

It’s hard to pick which of the major accounting standards convergence projects has given investors the shortest shrift.  But leases is notable for one thing: the FASB’s handpicked Investor Advisory Committee (IAC) panned the [Read More...]

Before You Vote On the AICPA-CIMA Merger, Follow the Money

If you are an AICPA member, you would have recently received an email like this one:

“…[The AICPA’s] governing Council has authorized an online member ballot on a proposal by the AICPA and [Read More...]

Post the Convergence Mania: The New Revenue Recognition Standard Will Do Much More Harm than Good

A journey through recent accounting time…

It’s 2002

The Accounting Establishment declares that convergence of FASB and IASB rules is “inevitable.”  At the top of a very long convergence to-do list is revenue recognition.  It so [Read More...]

On Its “Materiality” Proposals, Will the FASB Heed the Handwriting on the Web?

As I described in a previous post the FASB has two related proposals on the table related to materiality and financial statement notes:

An amendment to Concepts Statement No. 8 to replace its ersatz definition [Read More...]

Long on “The Big Short”

With the Oscars nigh upon us, I should tell you that I fell short of my goal to see The Big Short.   How did subprime mortgages morph into weapons of [Read More...]

Classification of Debt Prepayment Costs in the Statement of Cash Flows: What was the EITF Thinking?

I have been teaching undergraduate “Accounting Theory” for the past three years.  For reasons that I will explain below, I choose to begin the course by exploring differences between accrual accounting and cash flows; and relatedly, [Read More...]

FASB Fiddles (Again) While Banks Burn (Us Again)

While on the cusp of one more financial crisis, the time has come to ask yet again: What is the FASB accomplishing that will fix the deeply flawed accounting by banks for loan losses? Answer: nada, nichts, bupkis, absolutely nothing.

Instead, [Read More...]

Reining in “Non-GAAP Financial Measures”

At the recent AICPA-sponsored mega-conference on SEC and PCAOB developments (see KPMG’s summary, here), the SEC staff, and even its chair, devoted a significant amount of bandwidth to non-GAAP measures of financial performance.  Some [Read More...]

“Fairly Presented” in the Auditor’s Report—Puffery or Principle?

From the preface of Political Standards: Corporate Interest, Ideology, and Leadership in the Shaping of Accounting Rules for the Market Economy:

In subtle but significant ways, our corporate accounting system has been captured…. [Read More...]

FASB’s Proposed Materiality “Clarifications” are Backfiring

Something must have happened between my post criticizing the FASB’s proposals to reduce materiality to a legal exercise and last week’s meeting of the SEC Investor Advisory Committee.  Just prior to the [Read More...]

Camfferman and Zeff on the IASB

This is my third post for today.

About 20 years ago (it’s been that long already!), I had a fairly regular gig traveling to Europe and Dubai to make presentations about SEC disclosure requirements that [Read More...]

Materiality: The FASB is Shrinking the Envelope

This is the second of three posts today.  In this one, I want to talk about materiality — in general, and the recent proposals issued by the FASB. (The first post, a related one, [Read More...]

On Reconciliations and Financial Analysis

I have three things to write about today, which for the sake of length and ease of future reference, I will publish as three separate posts.  This is the first one.  

The FASB has [Read More...]

The Earnings Management is Hidden in the Details

With inspiration and encouragement from the John Hughes IFRS Blog, this post is a partial recycling from 2010 of Merrily We Roll Along — Forward and Up.   I had observed way back [Read More...]

Hoogervorst Hokum Re Historic Cost

After years of trying to work with the FASB on a revised conceptual framework, the IASB finally decided to abandon the goal of a fully converged framework and to finish a document for its [Read More...]