Peeling away financial reporting issues one layer at a time

Auditing Accounting Estimates: You are Invited to Comment on my Comment Letter to the PCAOB

Comments on the PCAOB’s Staff Consultation Paper (SCP), The Auditor’s Use of the Work of Specialists, are due July 31st.  This post consists of a draft of my comment letter, and I invite you [Read More...]

Instead of Converging Two Sacks of Mush, Let’s Reimagine What Accounting Could Be

Here is a summary of Chief Accountant James Schnurr’s recent remarks regarding IFRS:

Despite having been a national office partner at Deloitte, and being closely involved with the firm’s promotion of IFRS, he still needed [Read More...]

What is the FASB’s Simplification Initiative, Really?

The FASB’s “simplification” proposals are coming fast, and some of them are making me furious.  Proposed ASU No. 2015-260, which would roll back important anti-abuse provisions in ASC Topic 805—Business Combinations, is a [Read More...]

Proposed ASU EITF 2015-15B: Lipstick for a Pig of a Revenue Presentation Standard

The FASB has issued Proposed Accounting Standards Update EITF 2015-15B, Recognition of Breakage for Certain Prepaid Stored-Value Cards.  If finalized, it would change the way that retail merchants who sell gift cards for [Read More...]

The Grim Political Realities of the Impending Revenue Recognition Standard

On April 29th, the FASB issued proposed ASU 2015-240, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. It is widely expected that the Board will adopt a one year delay in [Read More...]

ASU 2015-03: The Latest Simplification to GAAP That’s Not

Relative to the big changes that are supposed to be coming from the FASB (leases, revenue recognition, loan impairment), ASU No. 2015-03 on debt issuance costs is very small potatoes.  But, if you are [Read More...]

The FASB’s New “Going Concern” Reporting Rules: A Solution in Search of a Problem

It has been, like, forever, that auditors have been issuing going concern warnings in one form or another.  Back in the days when historic cost was the sole basis for measurement of assets, and [Read More...]

Sweet Next-to-Nothings from the SEC’s Chief Accountant

I’m not going to beat around the bush here.  James Schnurr’s first major speech as the SEC’s Chief Accountant amounted to 3,000 words of next-to-nothing.  He achieved this prodigious rhetorical feat with a medley [Read More...]

Oil Stocks are Taking a Beating — But in 10-K’s, Not So Much

I have already warned you that if high quality financial statements from oil and gas companies are what you are looking for this year,  you won’t find much of that in 2014 annual [Read More...]

The Double Illusion of Financial Statement Comparability and Auditability: Through the Lens of Falling O&G Prices

My inspirations for this post are the maiden speech of the SEC’s new chief accountant James Schnurr, and the joy of paying only $2.02/gallon at the pump.

As for Mr. Schnurr, I plan to [Read More...]

Research on Accountants’ Salaries

The following message is from Jennifer Stevens, professor in the Department of Accountancy at the University of Notre Dame.

Fellow accountants – we need your help.

How much did an entry-level accountant make in 1960 as [Read More...]

Gross versus Net Presentation: The First of Many Revenue Recognition Debacles to Come?

Pick any class of upper-level accounting students, and give them a few cases of supplier/customer relationships for which “gross versus net presentation” of revenues is an issue, and I’ll wager that the class will come [Read More...]

Accounting Estimates: What Investors Should Want

Last week, the PCAOB convened its Standing Advisory Group to discuss the topic of auditing accounting estimates and fair values.  I was invited to be on a panel providing investors’ perspectives.*

This post mainly consists [Read More...]

Revenue Recognition: A Litmus Test for Convergence with IFRS

Do you remember the Big Four mantra that IFRS adoption in the U.S. was “inevitable”?  Today, thankfully, the operative word is “dead.”  Even former SEC chair, Christopher Cox, whose brainchild was the IFRS adoption [Read More...]

Trying My Best to Save LOCOM for Inventory

In my previous post, I expressed my opposition to the FASB’s proposal for replacing the LOCOM rule for inventory with “lower of cost or net realizable value.”

I stated that the extant U.S. GAAP [Read More...]