Peeling away financial reporting issues one layer at a time

Category for Economics

Double-Entry Accounting in Modern Times

My Shareholder Oriented Financial Accounting (S-OFA) Standards will require that debits equal credits.

Duh.  But if I am truly going to start with a clean sheet of paper, then I am compelled [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...]

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...]

“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...]

Trying My Best to Save LOCOM for Inventory

In my previous post, I expressed my opposition to the FASB’s proposal for replacing the LOCOM rule for inventory with “lower of cost or net realizable value.”

I stated that the extant U.S. GAAP [Read More...]

The FASB Wants to Dumb Down Inventory Impairment

OK, let’s start with something positive.  The FASB recently issued proposals to simplify two accounting topics, and whaddya know, I am actually in favor of one of them.

The “extraordinary item” income statement category is [Read More...]

High Frequency Trading: What Would Cicero Say?

This post is a little different from my posts on accounting issues.  I’m going to weigh in on the high frequency trading (HFT) brouhaha that was ignited by the recent 60 Minutes report [Read More...]

Why We Love Spreadsheets Too Much

I have been a habitual spreadsheet user for 30 years, and a Keynesian for, like, forever.  That particular pairing of predilections is probably why I experienced a brief and thrilling shiver of Schadenfreude as [Read More...]