Peeling away financial reporting issues one layer at a time

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...]

Has the FASB Approached Lease Accounting as an “Independent” Standard Setter?

The FASB is now 40 years old, and its lease accounting standards are about the same age.  Some would say that SFAS 13 was obsolete when issued, but it only became a front-burner [Read More...]

The Financial Accounting Foundation Has Outlived Its Usefulness (As if it Ever Was)

Let’s pretend that we could decide anew how accounting standards for U.S public companies should be promulgated.  Who would want the operations to be run by the Financial Accounting Foundation?  Are there other [Read More...]

Stock Compensation Accounting: A Drop in the Ocean Against a Tide of Management Greed

When FAS 123R came into effect in 2005, it had been finally ordained that stock option grants must be accompanied by some modicum of expense recognition.  The FASB had fought the good fight and [Read More...]

The IASB’s Quixotic Attack on Disclosure “Boilerplate”

If the FASB and IASB are doing such a good job mucking up financial statements by working together on convergence projects, why have they decided to go their separate ways in their quests to seek [Read More...]

The FRF for SMEs is a “Sack of Mush” — According to Walter Schuetze

Shortly after my most recent post on the AICPA’s new FRF for SMEs,  NASBA issued a press release that was clearly intended to keep the public spat between the two national organizations [Read More...]