New Revenue Recognition Rules and Tech Firms

A student of mine brought to my attention an article in the Wall Street Journal September 24, 2009, “Investors Should Focus on Apple’s Core.”  In that article, Martin Peers points out that existing guidance for firms who have products that combine hardware and software, like Apple’s iPhone, required firms to obtain specific evidence about the [...] Read more > >

Round Table Discussion on Changes in the Revenue-Expense Relation

On Wednesday, September 16th, 11 am ET, Dain Donelson, Ross Jennings, and John McInnis, all of the University of Texas at Austin, will join us to discuss their recent paper entitled “Changes over Time in the Revenue-Expense Relation: Accounting or Economics?”  Their paper follows the work of Dichev and Tang (2008), who document Read more > >

Fair Value Quiz

What industries have the largest percentage of their assets measured under fair value standards?  Whisper your answer to the person sitting next to you before clicking to see the answer, courtesy of this paper by Gartenberg and Serafeim of HBS. Read more > >

AAA FASC Weighs in on Revenue Recognition

The AAA Financial Accounting Standards Committee (FASC) recently submitted a comment letter in response to the FASB/IASB’s discussion paper on revenue recognition. This letter is unusual because it is one of few (if any others) that draw on existing academic research to support its arguments. In that regard, the FASC has provided a useful service [...] Read more > >

Office Hours: Who’s Afraid of Performance Reporting?

Kathy Petroni (Michigan State) will be joining us June 10th, 11am ET, to talk about her paper “Comprehensive Income:  Who’s Afraid of Performance Reporting?”. The paper, co-authored with Linda Bamber, John Jiang and Isabel Wang, now forthcoming in The Accounting Review, touches on some timely and controversial topics. Read more > >

Revenue Recognition Constraints and Earnings Informativeness

Anup Srivastava (Northwestern) presented a research paper at today’s FASRI Office Hours. In this post, I briefly recap the takeaways from the paper and some of the questions that were asked by participants in today’s office hours. Read more > >

Did SFAS 131 (Segment Disclosures) work?

During today’s Research Office Hours, Christine Botosan, Susan McMahon, and Mary Stanford shared insights from their recent working paper “Representationally Faithful Disclosures, Organizational Design, and Managers’ Segment Reporting Decisions.”  In their paper, they investigate whether SFAS 131 had its intended effect — providing users with better information about segment disclosures by encouraging more disaggregated segment [...] Read more > >

Record Crowd to Discuss Fair Value at Office Hours

Leslie Hodder led a discussion of fair value accounting at Office Hours.  We had over 30 avatars present, some of them acting as the eyes and ears of a roomful of faculty and doctoral students.  A number of attendees wanted a copy of  Leslie’s  fair-value slides. Leslie started off the discussion with a review of [...] Read more > >

Dim Outlook for International Convergence?

The FASB wrote a comment letter to the SEC on the roadmap to  international convergence, accompanied by a tour-de-force literature review by Luzi Hail, Christian Leuz and Peter Wysocki. The upshot of the research is that the US is unlikely to to see strong benefits to a formal convergence process, in part because our accounting [...] Read more > >

Accrual Anomaly Research for Standard Setters (not Money Managers)

At today’s office hours, Bob Lipe presented this working paper with Lail and Yi.  The upshot of the paper is that we need to be very careful when we think about the standard-setting implications of the accrual anomaly.  It is tempting to say that accrual standards must be a problem because (as the Richardson, Sloan, [...] Read more > >