The Wall Street Journal reported yesterday (Feb. 19, 2008) that General Electric Co. (GE) "...is expected to make changes to its accounting policies and procedures in an effort to end a long-running Securities and Exchange Commission probe.... The formal investigation…
This post examines the onion skin, if you will, of the new business combination standards. I'm going to explain the differences between the so-called 'purchase' method of accounting and the new 'acquisition' method. As is my habit, let's begin with…
A few weeks ago, I wrote a post entitled "FAS 157: Fair Value Has left the Station--But Is It on the Wrong Track?" Walter Teets of Gonzaga University and I have converted it to a working paper. The new title…
I made a conscious decision to eschew formulas in my recent post on the difficulty the FASB has had in creating a standard that results in a reasonable classification of liabilities and equity. An exchange of emails with Accounting Onion…
I just finished reading a brief, highly readable and interesting article by a Columbia Law School professor, John C. Coffee, Jr., entitled A Theory of Corporate Scandals: Why the U.S. and Europe Differ.* The purpose of this post is to…
The CFA Institute recently published a monograph entitled A Comprehensive Business Model: Financial Reporting for Investors, calling for a "...broader, more comprehensive business reporting that provides sufficient information to investors that is needed to understand the wealth-generating [emphasis supplied] activities…
In yesterday's post, I wrote about Merrill's big bath charge. Two other recent news items confirm that not much as changed since Arthur Levitt declared war on earnings management games almost 10 years ago: the big bath accounting charge still…
In a story whose main subject was increasing auditor vigilance, the Associated Press wrote as follows on November 2, 2007: "Merrill Lynch last week reported a bigger-than-expected $8.4 billion in writedowns.... On Oct. 5, the investment bank had initially said…
It should come as no great surprise to savvy analysts that far too many accounting standards were written to benefit someone else other than investors and analysts. FAS 144 on impairment of long-lived asset is yet another example, but perhaps…
I speak U.S. GAAP most of the time, so when I prepare to deliver courses on International Financial Reporting Standards (IFRS or IAS are basically interchangeable acronyms), I begin by re-reading some of the key standards, focusing especially on those…