Peeling away financial reporting issues one layer at a time

Category for Contingent Liabilities

Proposed ASU No. EITF100F: Health Care Entities Can Choose Their Poison

If you are teaching an accounting class, here's a simple and timely (I'll explain why, later) assignment for your students:

Facts: Company XYZ is a manufacturer that is being sued by a person claiming [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...]

More Reasons to Excise Contingent Liabilities from Balance Sheets

In responding to my previous post on contingent liabilities, a few of my kind and sensitive readers raised the following points:

Why should there be a difference in the accounting for a law [Read More...]

High Time to Abandon the Accounting for Contingent Liabilities

What the FASB calls “contingent liabilities” in FAS 5, the IASB terms “provisions” in IAS 37. I prefer the IASB’s language, because of its pejorative ring to my American ears: it more clearly connotes [Read More...]

The SEC’s Fair Value Roundtable: No Fireworks

On July 9, 2008, in Washington, DC, the SEC hosted a roundtable “to facilitate an open discussion of the benefits and potential challenges associated with existing fair value accounting and auditing standards.” The roundtable [Read More...]

The Revisions to IFRS 3: Bad Enough to Abandon Faith in IFRS?

In my previous post, I described how an SEC honcho, while speaking to the choir at an event sponsored by FEI, espoused his version of faith-based accounting; though he could not provide a single, solid [Read More...]

Contingent Liabilities: A Troubling Signpost on the Winding Road to a Single Global Accounting Standard

By the logic of others, which I can’t explain, fuzzy lines in accounting standards have come to be exalted as “principles-based” and bright lines are disparaged as “rules-based.”  One of my favorite examples (actually a [Read More...]

AS 5: The Illegitimate Child of FAS 5

This is a rather long post, for which I apologize in advance.  It is an adaptation of a much more diplomatic comment letter that I wrote to the PCAOB, criticizing its proposed, and [Read More...]