Peeling away financial reporting issues one layer at a time

Category for Loans and Receivables

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...]

How GAAP and IFRS Succeed in Overstating Bank Capital without Really Trying

As I stated in my post on ASU 2015-03, the accounting for debt issue costs is relatively small potatoes. The point was to illustrate that the FASB’s so-called “simplification initiative” was driven [Read More...]

Loan Accounting: It’s High Time for the SEC to Step Up to the Plate

“Full convergence with the United States – leading to the creation of one single set of global accounting standards – is no longer an achievable project…   But IFRS moves on – we have [Read More...]

Look Beyond the Firms for the Root Causes of Audit Deficiencies*

The International forum of Independent Audit Regulators (IFIAR) has published its second annual survey of audit inspections of the Big Four plus BDO and Grant Thornton firms around the world:

“The leading areas of [Read More...]

The CFA Institute Survey on Loan Accounting Needed to Go Deeper

(See a correction at the end of this post.)

The CFA Institute has recently published a report that summarizes the findings of its member survey on the FASB and IASB’s proposals for recognition and [Read More...]

Hank Paulson Says Another Financial Crisis is Inevitable: The FASB is Working to Prove Him Right

Hank Paulson, former Treasury Secretary, recently gave an interview to Marketplace host Kai Ryssdal to mark the fifth anniversary of the Lehman Brothers bankruptcy.  More to the point, Mr. Paulson said that he decided [Read More...]

For Whom Does the FASB Toil? (Not for Investors)

The FASB’s exposure draft on loan losses is a huge disappointment:

Investors will not be helped by this approach; The numbers produced by the ED will be whatever the bank CEO wants; The wording of the ED [Read More...]

Loan Accounting? The Public Can’t Handle the Truth!

Even if the average citizen might have shrugged with resignation over the Senate’s abandonment of gun control legislation, surely she must be in awe of the power of the NRA to bend democratically-elected [Read More...]

Why Nothing Sticks to Auditors when Loans Go Bad

I read numerous news sources this week echoing the SEC's announcement that it finally has a case it thinks it can win against auditors stemming from the 2008 financial crisis. One journalist, [Read More...]

FASB Pretends It Never Voted to Mark Loans to Market

I will have a lot to say about the FASB's recent publication of its proposed revisions to the accounting for loans over the next few months. In particular, I'm going to vivisect the horrendous [Read More...]