I wonder why so little is made of the fact that key technical terms in U.S. financial reporting are misleading perversions of plain English? As a sampling, consider these, which I have written about in postings over the years:“Goodwill” is rarely goodwill. “Translation” is random number generation. Identifying a future event as “probable” is pretty much at the whim of the issuer. “Impairment” has little or nothing to do with an asset’s capacity to function. “Fairly presented” is anything but. FASB “due process” is a myth.
Each one of these weasel terms contributes to a state of affairs in which “accounting” — as in Generally Accepted “Accounting” Principles or Financial “Accounting” Standards Board — is not actually accounting in the ordinary sense. “Accounting” in compliance with GAAP has become more complex with each passing year, that much is for darn sure. But just how very much the gap widens between “accounting” and accounting is not [Read More...]