Financial Accounting’s Relevance Lost
My best insights (but who am I to judge?) come from reading something for which accounting is the furthest thing from the author's mind: "My own view is that people tend to underestimate the pace of technological change but they…
How Deferred Tax Accounting Blunts Government Incentives to Invest in Renewable Energy
One of the items in my inventory of pet peeves when I first started blogging (six years ago!) was interperiod tax allocation, familiarly known as "deferred tax accounting." I've always objected to it on theoretical grounds, and know that it…
Has Convergence Been a Mixed Bag or a Bag of Fertilizer?
Continuing with my theme of the U.S. GAAP/IFRS convergence misinformation campaign being waged by the Journal of Accountancy, the latest and greatest example is an article from the February edition, "What have IASB and FASB Convergence Efforts Achieved?" that appeared…
Don’t Rely on “Journal of Accountancy” for Balanced Reporting of IFRS
In the main, the only reason my wife and I subscribe to magazines and newspapers in hardcopy is because she prefers them. I much prefer to get as much as possible from the web; the lone anomaly being the Journal…
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 Bloomberg columnist Jonathan Weil’s coverage of yet another…
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 that the goodwill HP initially recorded from the…
The Death and Transfiguration of “Substance Over Form” in U.S. GAAP
Over the years, the notion of accounting for "substance over form" has been trumpeted in IFRS circles as the apotheosis of principles-based accounting. From a practical standpoint, something like it is absolutely necessary for filling in the large gaps in…
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, Jon Weil of Bloomberg, takes it a step…