Peeling away financial reporting issues one layer at a time

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...]

FASB Decrees that 2 + 2 < 4

On the one hand, I am happy to report that we are approaching the end of the darkest era in the history of U.S. accounting standards, during which the Accounting Establishment did their best [Read More...]

Move Over Kickstarter, Here Comes Crowdfunding

Yesterday was a big day for the capital markets.  For the first time, startups can raise (relatively small amounts of) capital from the public without registering with the SEC and by offering its [Read More...]

From Where I Sit, Where Investors Should Stand on the New Lease Accounting

It’s hard to pick which of the major accounting standards convergence projects has given investors the shortest shrift.  But leases is notable for one thing: the FASB’s handpicked Investor Advisory Committee (IAC) panned the [Read More...]

Before You Vote On the AICPA-CIMA Merger, Follow the Money

If you are an AICPA member, you would have recently received an email like this one:

“…[The AICPA’s] governing Council has authorized an online member ballot on a proposal by the AICPA and [Read More...]

Post the Convergence Mania: The New Revenue Recognition Standard Will Do Much More Harm than Good

A journey through recent accounting time…

It’s 2002

The Accounting Establishment declares that convergence of FASB and IASB rules is “inevitable.”  At the top of a very long convergence to-do list is revenue recognition.  It so [Read More...]

On Its “Materiality” Proposals, Will the FASB Heed the Handwriting on the Web?

As I described in a previous post the FASB has two related proposals on the table related to materiality and financial statement notes:

An amendment to Concepts Statement No. 8 to replace its ersatz definition [Read More...]

Long on “The Big Short”

With the Oscars nigh upon us, I should tell you that I fell short of my goal to see The Big Short.   How did subprime mortgages morph into weapons of [Read More...]