Last Thursday, a new reader (who prefers to remain anonymous) wrote: "Have you considered addressing the hotly debated issue of how assets sold into the TARP [Troubled Asset Relief Program] will be accounted for by banks, and whether the prices…
While most politicians in Washington were trying to figure out how to solve the current financial crisis with real cash, my congressman*, John Shadegg (Rep. - Arizona), and a few of his colleagues have been fiddling with accounting rules while Rome burns.…
A member of the AECM listserv reported that today's episode of "60 Minutes" explained that a credit default swap (CDS) "was actually an insurance instrument, and perhaps fraudulently sold as [a] financial instrument to avoid insurance regulations and insurance regulators."…
In the current environment, I am an ardent supporter of those who would resist calls to suspend fair value accounting rules. But, when I was at the SEC, I had a front-row seat on what was perhaps one of the…
I concluded my previous post by stating that financial reporting could be a lot less complex if the exclusive focus were on providing information of value to investors. There are many examples of the costs of failing to adhere to…
On July 9, 2008, in Washington, DC, the SEC hosted a roundtable "to facilitate an open discussion of the benefits and potential challenges associated with existing fair value accounting and auditing standards." The roundtable was webcast and lasted about four…
I am finally ready to contribute my two cents to the debate as to whether SFAS 157 is at least partly responsible for the subprime mortgage mess. I have pointed out in other contexts (here and here) the serious shortcoming…
FAS 157 on fair value measurements was supposed to provide comprehensive guidance for determining the fair value of pretty much any asset or liability. Yet, almost two years after its initial publication, and well after companies have had to apply the…
"Breaking the Rules and Admitting It" is the title of Floyd Norris's column describing the accounting by Société Générale for the losses incurred by their rogue trader Jérôme Kerviel; the title is provocative enough, but it's still not adequate to…
I subscribe to a listserv for professors of accounting (http://pacioli.loyola.edu/aecm/) to discuss emerging technologies, pedagogy, and pretty much anything else. One of the recent topics of discussion on the listserv had to do with the impact of accounting complexity on…