Identifying the Most Basic Sources of Disagreement Over Standard Setting

Reading Kothari, Ramanna and Skinner’s answer to the question “What Should GAAP Look Like?” makes me want to get a better handle on the different perspectives academics are bringing to their criticism of accounting standards and the standard-setting process.  This will probably be the first of several posts, and I want to start with 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 > >

How True or Fair is “True and Fair”?

One of the topics that came up in last week’s Round Table on Alternative Conceptual Frameworks was a discussion of the true and fair override. It came up when we were talking about one difference between US GAAP and IFRS being that Read more > >

Is Accounting’s Conceptual Framework Unique?

During today’s Round Table Discussion, an issue arose as to why (some, many?) accountants feel the need for a conceptual framework.  One contributor noted that Basu and Waymire have a paper that observes other business disciplines (e.g., marketing) do not appear to have conceptual frameworks.  Why accounting? Read more > >


Following up on my last post, I had a very entertaining discussion with a Very Successful Accounting Researcher (VSAR) last week at the AAA meetings on the topic.  After VSAR criticized some decision or other of the FASB, I asked “Why do standard setters make such awful decisions?”  We were talking in a noisy room [...] Read more > >

Why Do Standard Setters Make Such Awful Decisions?

Everyone, it seems, likes to complain about the decisions of the FASB and IASB.  Some complain that the Boards are too beholden to the wishes of preparers, by allowing them to park debt off their balance sheets, hide volatile income numbers in the Statement of Changes in Shareholder’s Equity (rather than running through earnings), and [...] Read more > >

Round Table Discussion: Alternative Conceptual Frameworks

Tuesday, August 11th at 4pm we will be discussing two alternatives to the FASB’s Conceptual Framework Project. One is this document from by the AAA’s Financial Accounting Standards Committee, which Jeffrey has already written about.  I dissented from this document, primarily because it didn’t attempt to specify the objectives of financial reporting (you can read [...] Read more > >

Thinking about Alternative Conceptual Frameworks

The AAA’s Financial Accounting Standards Committee recently put together a proposal for an alternative conceptual framework. Conceptual frameworks (CF), by their nature, deal with such fundamental and far-reaching concepts that these types of intellectual ventures are bound to generate disagreement. This proposal is no exception, as evidenced by the dissenting opinions, and is not only [...] Read more > >

Persistent Myths (or Misunderstandings) in Accounting Measurement: Stumbling Blocks to Improved Standard Setting, Research, and Practice

As I mentioned during a recent session of office hours that I hosted, I believe there are a number of persistent myths in accounting that seem to get passed on from generation to generation.  I promised to share them on the blog, so here they are.  Read more > >

Standards for Nonfinancial Performance Measures?

Another Doctoral Consortium post–this one from a managerial accountant!  Whose to say we can’t all learn from one another….RJB. Nonfinancial performance measures (NFPM) are parameters used to evaluate nonfinancial performance aspects of an organization.  Frequently the MD &A or company web pages that disclose information include Key Performance Indicators (KPI) or Non-Financial Performance Measures.  Researchers [...] Read more > >