A reader of my post on the CFA Institute's critique of the IASB's hedge accounting exposure draft suggested that I write to the two members of the IASB, Patrick Finnegan and Patricia McConnell, who had a close association with the…
If you want to appreciate the political circus masquerading as "due process" in accounting standards setting, I recommend that you read two recent documents. The first one is the CFA Institute's stinging 39-page comment letter* on the IASB's hedge accounting…
I hand-waxed my 1990 Honda Accord last weekend in celebration of its 21st birthday. Since it still runs like a top, I can take some satisfaction in having 'improved' my car. On the other hand, and it should go without…
On Monday evening I received an email from Denny Beresford, former FASB chair (once again via the AECM listserv). Although I feel compelled to state that Denny's letter does not change my own views on the key issues, it provides much…
If you want to understand the causes of the financial crisis from 25 pages instead of the 600 pages burped up by the FCIC, then read this: Understanding the Subprime Financial Crisis, by Duke Law professor Steven L. Schwarcz. I…
Darn few, if anyone who wrote about the Financial Crisis Inquiry Commission's 600-page report has anything good to say about it. Jonathan Weil at Bloomberg may have described its shortcomings as well as anyone, and he also provides a vivid example of how the…
If I may be permitted to say so myself, my principles-based solution for curing repo accounting abuses is the bomb. The off-balance sheet effects of repo accounting could be obliterated by a simple 'gross up' (i.e., separate presentation) of: (1)…
Last November, the FASB issued Proposed Accounting Standards Update 1900-100, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements: "During the global economic crisis, capital market participants questioned the necessity and usefulness of the collateral maintenance guidance…
Some folks can see fine art in a soup can label, or poetry in a user's manual. I don't mean to brag when I state that I have a similar talent. I seem to have a knack for stumbling upon interesting accounting…
Kudos to The Economist for summarizing in slightly more than one-third of a page the critical issues that will determine the future of financial reporting. Leading off: "Despite the departures of Sir David [Tweedie, IASB] and Mr Herz [Robert, FASB],…