What is the Meaning of “Substantial Doubt”?

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 > >

SEC Releases IFRS Studies

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

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 [...] Read more > >

FAF Recommends Condorsement to SEC

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 [...] Read more > >

FASB & IASB Propose New Revenue Recognition Standard

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 [...] Read more > >

Financial Instruments

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 > >

Neat case

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 [...] Read more > >

How to Write a Statement of Purpose for a PhD Program in Accounting (or perhaps any other field)

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 [...] Read more > >

A new dimension to disclosure reform

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 > >

Are AFS Securities Tested for Impairment Anymore in IFRS?

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 > >

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