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 that she was injured from using…
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 banks and their minions of financial…
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 requiring sellers to compensate their customers for…
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 the virtually unchecked discretion issuers have…
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 was webcast and lasted about four…
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 reason to explain why the U.S.…
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 pet peeve) of this phenomenon is…
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 ultimately adopted, definitions of 'material weakness' and…