Peeling away financial reporting issues one layer at a time

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...]

“The Bankers’ New Clothes” is NOT a Fable

There are two types of people in the world: those who like to divide people into two types, and those who don’t.

Too simple? OK, try this one: some people find taxonomies very helpful; and others, not [Read More...]

How GAAP and IFRS Succeed in Overstating Bank Capital without Really Trying

As I stated in my post on ASU 2015-03, the accounting for debt issue costs is relatively small potatoes. The point was to illustrate that the FASB’s so-called “simplification initiative” was driven [Read More...]

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...]