FASRI Roundtable: Rules vs. Principles-Based Standards

On February 26, FASRI will host a Roundtable discussing issues related to rules vs. principles-based standards.  Professor Rick Mergenthaler from the University of Iowa will lead a discussion based on his research into rules vs. principles-based standards and how they relate to litigation, earnings management, and other earnings attributes. For background you can read Professor [...] Read more > >

New Proposed ASU on Reclassifications of AOCI

On August 16, the Board issued a proposed ASU, which addresses the manner in which companies are to present the effects of reclassifications out of accumulated OCI.  This proposed update was necessitated last December when the Board issued ASU 2011-12, which deferred the effective date for the reclassification adjustments requirement in ASU 2011-05.  (For a [...] Read more > >

Consensus for Leases is Difficult to Find

I’m going into my last week as a FASB Research Fellow.  The past year has been very educational for me as I’ve observed up close the process that the Board goes through in promulgating standards.  I’ve developed a better understanding as to why some projects proceed at a painstakingly slow pace.  I’ve also gained a [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 6)

(Previous Posts: Part 1, Part 2, Part 3, Part 4, Part 5) Here is the sixth in a series of working papers that I am preparing to explain “Approach Y”—a lease-accounting model for entities that are lessees. The new working paper provides additional evidence that the “Interest and Amortization” (I&A) model (formerly known as “Approach A” [...] Read more > >

FASRI Roundtable: FASB Projects on Leases

On July 24, FASRI will host a Roundtable on the latest developments for the FASB/IASB joint project on leases.  Leasing is a significant source of financing in the economy, but the current capital/operating lease accounting treatment has long been criticized as not meeting the needs of financial statement users and resulting in non-GAAP adjustments by [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 5)

(Previous Posts: Part 1, Part 2, Part 3, Part 4) Here is the fifth in a series of working papers that I am preparing to explain “Approach Y”—a lease-accounting model for entities that are lessees. The new working paper focuses on the significant implications of Approach Y’s terminology, i.e., the specific words and phrases that are integral [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 4)

(Previous Posts: Part 1, Part 2, Part 3) Here is the fourth in a series of working papers that I am preparing to explain “Approach Y”—a lease-accounting model for entities that are lessees. The new working paper summarizes the structural aspects of financial-statement presentation and disclosure under Approach Y and three other approaches. The summary supports the [...] Read more > >

Insurance Accounting: More evidence on the viability of true convergence

In a report this past April to the Financial Stability Board, the FASB makes this statement about accounting convergence: The FASB believes that the ultimate goal of convergence is a single set of high-quality, international accounting standards that companies worldwide would use for both domestic and cross-border financial reporting. The statement is explicit that the [...] Read more > >

The IASB and FASB Decide on Lease Accounting

The IASB and FASB are meeting in London this week where leases is on the agenda.  At the meeting, the Boards proposed a standards update that will require all leases with a term in excess of one year to be capitalized on the balance sheet.  No surprise there; that has been the Boards’ position since it released [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 3)

(Previous Posts: Part 1, Part 2) Here is the third in a series of working papers that I am preparing to explain “Approach Y”—a lease-accounting model for entities that are lessees. The new working paper evaluates the conceptual bases of Approach Y and three other approaches with regard to subsequently measuring right-of-use (RoU) assets. The results of this evaluation [...] Read more > >