Peeling away financial reporting issues one layer at a time

The Asset “Impairment“ Song and Dance (Part 1 of 2)

Two recent news items have made this an opportune time for a post — actually, two posts —  about the accounting for the “impairment” of an asset.

The SEC is considering whether Exxon violated the [Read More...]

Introducing ‘Shareholder-Oriented Financial Accounting’

Last December, I announced that I have started to write a book that would propose a very different basis for financial accounting by public companies.  I’m calling it ‘Shareholder-Oriented Financial Accounting’ (S-OFA), and this [Read More...]

Revenue by (Logical) Deduction

It seems there is always good reason to write a post about revenue recognition.  I can even envisage an entire blog on  the FASB’s new standard (ASC 606). It could go on for years without [Read More...]

Could Wells Fargo be the Next Big MD&A Enforcement Action?

The question occurred to me after reading Francine McKenna’s coverage of Senate hearing testimony by Wells Fargo’s CEO about the nearly 2 million unauthorized credit card and savings account openings.  I don’t know if the [Read More...]

More Not to Like about Deferred Taxes: The Foreign Earnings Loophole

A seasoned accountant and regular reader of my blog wrote that, until my last post, he had seen little discussion of the potential to manage the effective tax rate upwards. He has, however, [Read More...]

Of What Use is Deferred Tax Expense to Financial Analysts?

Interperiod tax allocation has been required since the 1950s, soon after Congress permitted tax deductions based on accelerated depreciation of long-lived assets.  History indicates that the accounting standard setters who pushed for [Read More...]

Deferred Taxes and Tax Reform: Is a Big (Fictional) Accounting Gain in the Future?

I read today that Congress is likely to consider corporate tax reforms that would reduce the statutory income tax rate from the current 35% to as little as 15%.  The lower income tax [Read More...]

Why the FASB Won’t Define “Financial Accounting”*

The FASB has been prolific by any measure. The codification of authoritative GAAP alone is almost 8,000 pages for goodness sake. Believe it or not, that’s about twice as wordy as the [Read More...]

The Parable of the Good Big-Four-Congressman

U.S. Representative Scott Garrett (Republican, New Jersey) was first elected to Congress in 2002, months after the passage of the Sarbanes-Oxley Act.  A couple of weeks ago, he introduced legislation that would amend S-OX [Read More...]

Is “Accounting” Really Accounting?

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 [Read More...]

FASB Proposed Modifications to Hedge Accounting: Good Thing, Bad Thing, or Just a Thing?*

If we don’t destroy ourselves first, we will someday discover intelligent life on another planet.  But when we do, the chances are about one in a billion that we’ll find hedge accounting standards more complex [Read More...]

Was Donald Trump Complicit in a Securities Fraud?

What do the race for U.S. President and financial reporting have in common?

Non-GAAP performance measures!

It’s looks like a stretch, I know, but stay with me. If you will give me a moment to tell you about [Read More...]

How Accounting Standards Went Insane: It Didn’t Start with IFRS Convergence

If you subscribe to The Atlantic magazine, the title of this post may ring a bell — a riff on  “How American Politics Went Insane: It Didn’t Start with Donald Trump…”  from the July/August edition.  Now that [Read More...]

On the Use of “Fair” in the Auditor’s Report: A Conversation with David Damant

My previous post addressed three aspects of the auditor’s report:

The PCAOB* proposal to require a discussion of “critical audit matters”; Whether use of non-authoritative GAAP should be given special mention by the auditors; and The [Read More...]

The PCAOB on the Auditor’s Reporting Model: Great Progress and More To Do

Why is it that shareholders of the largest public companies could pay around $80 million for their boilerplate audit reports, if the shareholders of smaller public companies pay only $80 thousand for exactly the same [Read More...]