Peeling away financial reporting issues one layer at a time

Category for Business combinations

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

My latest post was about general problems with asset “impairment” accounting —  its absurdity, high cost and dubious information value.  And I haven’t even begun to hone in on the wurst part: goodwill impairment.

It is [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...]

Caterpillar: Another Sad Example of Bad Goodwill Accounting

After having just written a post on HP’s massive write-off of goodwill, I am reluctant to keep on banging the drum of how bad goodwill accounting can be.  But, I can’t resist following up on [Read More...]

HP’s Autonomy Debacle: Mistakes were Made — and Capitalized?

Companies overpay to acquire other companies all the time; but Hewlett Packard Co. just might be the new record holder for getting fleeced. I don't have the exact amount, but let's say [Read More...]

Ten Claims in Support of IFRS Adoption by the SEC – and Why They are False (Part Two of Three)

Click here for Part One of this Three-Part Series.

* * * * *

False Claim #2: A move to IFRS would restore the public trust in accounting standards.

I'm [Read More...]

“Goodwill Impairment” Accounting Could Become Less Costly – and Earnings Management a Lot Easier

When you start with a bogus asset like goodwill (itself a misnomer), it's hard to find quality in the rules that govern its measurement. The root of the problem is that business combination accounting [Read More...]

Is GM’s Equity For Real?

GM's recent filing of its registration statement with the SEC represents the collision of two topics I have written about. First, the fortuitous arrival of $30.2 billion of "goodwill" on GM's balance [Read More...]

A Simple Solution To Standard Setters’ “Control” Issues

In the good old days, you recognized the assets you owned. For the reasons why things eventually became a lot more complicated than that, there is plenty of blame to go around. Blame the [Read More...]

ASU 2010-19: When a Dollar of Cash Is More Than a Dollar on the Balance Sheet

If you think you can find a larger wart on the backside of US GAAP than the one I am about to describe, then give it your best shot.

Here it is in a [Read More...]

Goodwill Impairment: I Love a Charade

I have written about initial recognition of goodwill on numerous occasions. I suppose it might be less bothersome if goodwill had the good grace to sit and stay like a good dog [Read More...]