What are the Needs of Private Company Financial Statement Users?

With the recent FAF Board of Trustees vote to establish the Private Company Council (PCC), the next step in this process of developing rules for private companies is for the PCC (together with the FASB) to develop a framework that will determine when it is justified to have GAAP exceptions and modifications for private companies.  With [...] Read more > >

FAF Board of Trustees Approves Private Company Council

A news release today announced that the FAF Board of Trustees has approved a Private Company Council (PCC) that will have two principal responsibilities.  First, they will determine whether exceptions or modifications to GAAP are necessary to meet private company financial statement users.  Second, the PCC will serve as the primary advisory body to the FASB [...] Read more > >

Reading Between the Convergence Lines

In prepping a class session on convergence, I found a March 2012 speech by Meredith Cross, the SEC’s Director of Corp Fin, that raised an interesting possibility.  A select group of foreign companies that cross-list their securities in the U.S. and prepare their financial statements using IFRS as issued by the IASB might have to [...] Read more > >

Register to Participate in the FAF’s Review of SFAS 131

In case you missed it, the FAF has made a public call seeking survey participants for their post-implementation review (PIR) of SFAS No. 131.  The survey is not quite available yet, but the call is for people, including academics, to register for the survey.  In the FAF’s inaugural PIR on FIN 48, academics did not [...] Read more > >

Disclosure Framework Update

The FASB’s Disclosure Framework team is close to issuing an Invitation to Comment, which will present the staff’s thinking on this important project.  While this is a FASB only project, there are several other bodies that are watching the project closely, including the IASB and SEC.  This post provides a brief update on the project [...] Read more > >

Auditor Judgment Frameworks; or Principles-Based versus Rules-Based Accounting Standards Part II

A recent paper by Backof, Bamber, and Carpenter (2011, International Financial Reporting Standards and Aggressive Reporting: An Investigation of Proposed Auditor Judgment Guidance) investigates auditors’ judgments under IFRS and US GAAP.  The authors conduct an experiment where 200 auditors from a Big 4 accounting firm were asked whether they agree with management’s preferred accounting methods [...] Read more > >

FASRI Roundtable: XBRL

In my last FASRI blog post, I stated that XBRL represents a significant paradigm shift in financial reporting and analysis from paper/PDF based financial statements to electronic data that can be manipulated to meet users’ needs.  This paradigm shift has implications for not only what research questions we might ask (the subject of the prior [...] Read more > >

Does XBRL Make Financial Statement Presentation Issues Irrelevant?

On December 17, 2008, the U.S. Securities and Exchange Commission (SEC) required firms to use eXtensible Business Reporting Language (XBRL) when issuing financial statements to regulators or posting financial statements to their corporate websites (SEC 2008).  This mandate represents a significant paradigm shift in the financial disclosure environment.  Financial statement users potentially benefit from a) [...] Read more > >