Pragmatism on Fair-Value Complaints: The Perfect is the Enemy of the Good?

Christian Leuz sent me this thought piece today (with Christian Laux, forthcoming in Accounting, Organizations and Society), which provides a nice cool splash of realism on the often-overheated debate on fair value accounting. Perfect timing, given that later today Haresh Sapra presents his own views that fair-value accounting poses some serious risks to the stability [...] Read more > >

Office Hours: Haresh Sapra on Fair Value and Financial Stability

The last time we had an entire session focused on fair value accounting, our stated intent was primarily to discuss recent evidence on the value relevance of fair value accounting.  It didn’t take long for the conversation to turn toward questions of whether fair value accounting was destabilizing and/or pro-cyclical. This week, University of Chicago’s [...] Read more > >

Leslie Seidman: In the “Cautionary Camp” on Fair Value

A few weeks ago FASB Board member Leslie Seidman joined us for office hours.  We covered a lot of ground, and Ray has already written on some of her ideas for research.  I thought I would summarize her rather cautionary views on fair value accounting for financial instruments.  Playing to the academic audience, Ms. Seidman [...] 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 > >

Office Hours: Leslie Hodder on Fair Value Accounting

Leslie Hodder (Indiana University) will be joining us for FASRI Office Hours at 4pm ET, March 24th, to talk about recent research on Fair Value Accounting. No doubt we will talk a fair bit about FASB’s recent proposals to clarify FAS 157’s discussion on ‘active markets’ and to alter reporting of impairment (see here and [...] Read more > >

New Guidance on Other-Than-Temporary Impairments

The FASB just released a Proposed FASB Staff Position that would amend the other-than-temporary (OTT) impairment guidance in two FASB Statements (SFAS 115 and SFAS 124) and in EITF 99-20.  This Proposed FSP seems to make two big changes.  Read more > >

FSP FAS 157-e Proposes 2-Step Test for Determining Whether a Market is Not Active

A new FASB Staff Position proposes a 2-step test to determine whether a market is not active. This will hardly satisfy those who think firms shouldn’t have to use fair value accounting for the assets in question in the first place.  But for those who are simply complaining that market prices are ‘fire sale’ prices, [...] Read more > >

Research Ideas – Fair Value for Liabilities and Revenue Recognition

During FASB Research Office Hours on Tuesday, March 10, Leslie Seidman, FASB Board member, suggested the following questions as being of interest to the FASB regarding fair value measurement for liabilities. I believe that these questions are interesting and potentially addressable from multiple research perspectives. Moreover, I believe that work on these questions has the [...] Read more > >