Financial Accounting Standards Research Initiative

The current model of reporting other comprehensive income outside of earnings is controversial and receiving attention from standard setters.  The FASB/IASB Issues Conference this past December spent a significant amount of time on this issue.  Specifically, the primary issues are 1) presentation of OCI in the financial statements (which is the topic of the recently [...] Read more > >

On January 24 and 25, the FASRI will host a Roundtable on the FAF’s Post-Implementation Review.  In an effort to more effectively oversee the FASB and GASB activities and improve the standard-setting process, the Financial Accounting Foundation (FAF) announced about one year ago a new process to review promulgated standards by these Boards.  Referred to [...] Read more > >

The FASB’s project on Risks and Uncertainties (formerly “Going Concern”) has been full of twists and turns.  The most recent decision on this project was made this past Wednesday when the Board voted 4-3 against a proposal that would switch the responsibility of assessing the going concern assumption from auditors to managers.  To illustrate how this [...] Read more > >

Over a year ago, the FAF adopted a new program that would review major standards that have been outstanding for a period of time to assess whether the standard has achieved its financial reporting objectives.  This post-implementation review process was meant to improve the standard-setting process and facilitate more effective FAF oversight of the FASB [...] Read more > >

The FARS midyear meeting starts tomorrow.  Some blog readers are probably at the airport or in the air as I type.  The preliminary program is available here.  Looks like standard setting issues will once again be prominent at the meeting.  The plenary session Friday afternoon is titled “Current Topics in Standard Setting”, with panelists Jim [...] Read more > >

Click here to view the video recording of this Roundtable   The first FASRI Roundtable for 2012 will cover the newly proposed standard on Revenue Recognition.  FASB practice fellows Michael Breen (KPMG) and Heather Harris (General Electric) will lead the discussion.  Michael is a senior manager at KPMG and Heather is an Assistant Controller in the Global Mergers [...] Read more > >

At the same time when the FASB is trying to address the issue of disclosure overload, a failed attempt to converge standards has resulted in the FASB and IASB issuing new requirements for increased disclosures related to net positions on various contracts.  US GAAP allows companies to present derivatives on a net basis when they [...] Read more > >

Finals are over and the holidays are here – great time of the year.  As I anticipate FASRI activities for next year, I’m looking forward to the next batch of Roundtables.  This past semester, we had an opportunity to meet several new FASB Board Members, Hal Schroeder, Russell Golden, and Daryl Buck, as they each [...] Read more > >

ASU 2011-05, which was issued in June, required that firms report comprehensive income within a performance statement and prominently display on the face of the income statement the affected line items from recycling.  It was this latter requirement that caused heartburn for some preparers, and as Bob Lipe blogged here, the FASB exposed a proposal [...] Read more > >

Bob Lipe blogged last week on the SEC’s release of two documents related to their exploration of whether/how to integrate IFRS into US GAAP.  Since the release of those documents, the SEC, IASB, and FASB have all made public statements that provide insights as to where regulators and standard-setters sit on this issue.  The least informative [...] Read more > >

Many terms in accounting refer to a probability assessment.  The Contingencies Topic in the FASB’s Codification uses the terms probable, reasonably possible, and remote to describe the likelihood of events occurring that will confirm a loss contingency.   The phrase more likely than not is used in several topics, including, goodwill impairment and deferred tax assets, [...] Read more > >

A friend pointed me to an Accounting Today article that reports the release of SEC documents exploring IFRS.  One of them compares IFRS and GAAP for most transactions (some active MOU projects are omitted).  Another assesses how IFRS is being applied in practice.  I have not had the chance to study these yet, but  here [...] Read more > >

Pragmatics, Implicature and The Efficiency of Elevated Disclosure, an article now posted on SSRN that sprang from my thoughts about the FASB’s Disclosure Framework Project, which I discussed in my presentation on the Theories of Disclosure panel at the 2011 AAA Meetings in Denver. Here is the abstract: This paper uses a Pragmatic theory of language (drawn [...] Read more > >

comment letter to the Securities and Exchange Commission recommending that the SEC adopt a condorsement approach to incorporate IFRS into the US financial reporting system. The approach recommended by the FAF is somewhat different than the model of condorsement previously described by the SEC, but is similar in that the FASB would consult with the IASB [...] Read more > >

official news release, this new exposure draft addresses concerns raised in the 1000+ comment letters received in response to the first exposure draft. In particular, this exposure draft: adds guidance on how to determine when a good or service is transferred over time; simplifies the proposals on warranties; simplifies how an entity would determine a transaction price (including [...] Read more > >

The Boards have divided the project into three areas: 1) classification and measurement, 2) impairment, and 3) hedging.  The FASB will probably re-expose their decisions on classification and measurement in early 2012; impairments will probably be re-exposed later in 2012.  With respect to hedging, there is still too much work to be done to predict [...] Read more > >

I don't know if any of you saw this, but it is a great potential case. First, here's a story on Green Mountain Coffee Roasters in Barrons Click here. Second, here’s a link to the downloadable 110 slide presentation that the analyst (who is short the stock) did. It is amazing to watch the detailed peeling back [...] Read more > >

As someone who reads a lot of SoP's, here are the questions I want an applicant to answer, more or less in order: What is your purpose? What are your career aspirations?  What type of research do you want to conduct?  What topics and methods are you intending to pursue? What led you to your purpose? Why [...] Read more > >

One of the questions around the disclosure framework is how the FASB will coordinate with the SEC and IASB. One issue that may make this question even more interesting is that a new group has potentially inserted itself in the discussion. Last month, the PCAOB released a concepts statement outlining proposed revisions to the auditor [...] Read more > >

In the old IAS 39, Financial Instruments: Recognition and Measurement, unrealized gains and losses in available-for-sale securities were recognized in OCI. However, if an impairment loss occurred for that AFS security, the cumulative loss recognized in OCI was reclassified from equity to profit and loss (paragraphs 55(b) and 67-70). Moreover, impairment losses recognized in profit and [...] Read more > >