I thought we had a great discussion last Wednesday  regarding the link between revenues and expenses.  For those who could not attend, you can listen to the archive session.

  One of the key results in the Donelson, Jennings, and McInnis paper is that the special items component of earnings has increased recently, and this component of earnings causes a major attenuation of the “matching” between expenses and revenues. 

  I suggest that we have some future roundtable discussions on special items.  For the first session, it would be great to get a panel of researchers who have looked at special items extensively.  They can let us know what the items are, what accounting standards are primarily responsible for special items (if any), how frequent they are, how large they are, etc.   I would expect the descriptive information from this session would be of interest to some FASB staff.

  Another panel would consist of practitioners/standard setters/regulators discussing how preparers decide how to present a  transaction as a special item versus ordinary item, and what guidance exists for this designation.  Also, does the SEC never/sometimes/often raise questions about special items when it reviews filings?  A potential problem with this session is that maybe special items is a construct identified by analysts rather than preparers, in which case the panel would need to be different.

  If any Roundtable participants have done empirical work in the area or if a senior doctoral student has prepared an extensive literature review on special items, I invite them to contact Jeffrey Hales to discuss the potential for leading a roundtable discussion.  Or if participants know of someone who would be a good panelist, let me or Jeffrey Hales know, and we will contact them.