GAAP and Macroeconomics: Intangibles Edition

We have seen the articles linking fair value accounting to financial and macroeconomic instability.  Now comes an article in BusinessWeek arguing that expensing of internally-generated intangibles leads firms to look first to R&D and marketing when times get tough.  Moreover, they argue that this effect distorts GDP measures, because cost-cutting show increased income due to [...] Read more > >

Lessors not to derecognize leased assets

In their joint meeting in Norwalk, Connecticut this past week, the IASB and FASB reached the tentative conclusion that lessors will no longer derecognize leased assets. Instead, lessors will recognize a receivable and a performance obligation with revenue being recognized over time. Some think this approach is more consistent with the proposed new revenue recognition [...] Read more > >

I’m in APIC hell.

I have a comment and a question for all of you. Comment, I think the credit to APIC on a non-qualified employee stock option plan is crazy.  I understand the logic that the reason why we are crediting APIC is because our GAAP compensation expense is less than the tax deduction, so to credit ITexpense [...] Read more > >

Can IFRS produce global comparability?

I just read the abstract of a forthcoming paper (Kvaal and Nobes 2010) that compares the accounting policies of blue chip companies in the largest five stock markets that use IFRS. By comparing the policy disclosures in annual reports, the authors find “significant evidence that pre-IFRS national practice continues where this is allowed within IFRS.”  [...] Read more > >

The Financial Instruments Reporting and Convergence Alliance and This Week’s Joint FASB-IASB Meetings

I learned today of a consortium of financial industry groups called “The Financial Instruments Reporting and Convergence Alliance” (FIRCA).  The groups who joined together to form FIRCA include: American Council of Life Insurers, Commercial Mortgage Securities Association, Council of Federal Home Loan Banks, Group of North American Insurance Enterprises, Mortgage Bankers Association, Property Casualty Insurance [...] Read more > >

Interesting nugget that I learned last week

The accounting department here at UT has an outside advisory council.  We had a semi-annual meeting last Friday.  We happened to be talking about the new FASB codification system.  One advisor mentioned that the consequence they have seen is companies now FORGOING any mention of any standard in their footnotes.  You know, we are used [...] Read more > >

Every wonder where to find SEC rules?

I’ve been doing financial reporting in the classroom for a long time (20 years).  I always am unsure where to find SEC rules.  Well, my confusion is not unwarranted. My colleague here at Texas, John Robinson, is doing a faculty fellowship there this term.  He just came back to talk to us about it here [...] Read more > >

Finance Professors Won’t Bet on Market Ineffienciency

Read this. Read more > >

IFRS Conversion Resources, and an Addition to the Blog Roll

Someone passed along an email indicating this blog post, titled Big Four Firms Provide Excellent Resources on IFRS Conversion.  Now, not only do I have a wealth of links to useful information, but I have a new addition to our blogroll:  The Big Four Blog, whose tag is “Big Four news, events, happenings and opinions [...] Read more > >

Economic slowdown and financial reporting complexity

I got an email alerting me to some recent PriceWaterhouseCoopers publications.  Their Transaction Services group appears to be writing a series of papers on Financial Reporting in a Troubled Economy.  One report in particular caught my eye – “How the Economic Slowdown Leads to Added Financial Reporting Complexities.”  An interesting quote is “While financial reporting [...] Read more > >