In Praise of Mark-To-Management

Georgetown finance professor James Angel has written an interesting piece praising the benefits of what he calls mark-to-management (or what we fair value wonks would call Level 3 inputs), and argues the benefits of including all three dimensions of valuation (cost, market price and management models) in disclosures.  Of course we can’t recognize all of [...] Read more > >

FASB Proposes Update to Fair Value Disclosure Requirements

FASB is circulating an Accounting Standards Update that would clarify required disclosures about fair values.  Particularly noteworthy is that the Update proposes a detailed “roll forward” of fair value measurements using significant unobservable inputs (“Level 3″), which would provide a clear breakdown of how the total level 3 measurements changed as a result of: transfers [...] Read more > >

Fair Value Accounting From the Mouths of Babes Students: Zoe-Vonna Palmrose’s 2005 AAA Address

A few weeks ago, in a post entitled “Why Do Standard Setters Make Such Awful Decisions?,”  I cited Zoe-Vonna Palmrose as one of several academics who think that the FASB’s embrace of fair-value accounting is so obviously mistaken that even children could see it.  Bill Kinney pointed out that my recollection of Zoe-Vonna’s 2005 presentation [...] Read more > >

Bob Laux of Microsoft on Revenue Recognition, Comment letters, Fair Value…and General Motors

We had an excellent discussion today with Bob Laux of Microsoft. Whether you are looking for research topics or good stories for your students–financial or managerial–you will find this a very interesting discussion. You can now watch the archive live by going here, waiting through a 15 second commercial, and then clicking the “on demand” [...] Read more > >

Fair Value for ALL Financial Instruments, but Own Debt at Amortized Cost

Following up on Lisa’s post, I see that the FASB has summarized the key conclusions of this week’s Board meeting: The Board agreed to propose a model to improve financial reporting for financial instruments.   The Board reached the following decisions: Read more > >

Round Table on Securitization with Cathy Shakespeare

On Tuesday, July 28th, 4pm ET, Cathy Shakespeare will lead a discussion on securitization.  Cathy will start by giving us a gentle introduction to this complex commercial arrangement, and then use recent research to indicate directions for future work.  To get insights into one of the most central issues in securitization you might start with [...] Read more > >

Round Table Discussion with Bob Laux, Microsoft

Details on participation are here. On Wednesday, July 22nd, 11am ET, we will get a preparer’s perspective on the state and future of financial reporting standards from Bob Laux, Senior Director of Financial Accounting and Reporting at Microsoft.  Mr. Laux is responsible for Microsoft’s financial accounting, including  responding to GAAP questions and issues within Microsoft [...] Read more > >

Can you believe this?

Cathy Shakespeare sent me this link as we’re finishing off a paper (with Karen Nelson) on fair value. Some are jaw breakers. Good stuff. 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 > >

Brainstorming Session on Fair Value Research

In our next session of office hours (Tue, June 16th, 4pm ET), we will have our second brainstorming session. For those of you who couldn’t make the first brainstorming session, Bob Lipe led us in a discussion of research ideas related to leasing.  As in any good brainstorming session, Read more > >