Blue Ribbon Panel on Standard Setting for Private Companies

Next Monday (April 12) is the first meeting of the Blue Ribbon Panel on Standard Setting for Private Companies.  This has the potential to be a very wide-ranging and interesting continuation of a very long-standing discussion about GAAP for non-public entities. As I understand it, many years ago, the debate began and was labeled the [...] Read more > >

Professional judgment in financial reporting

In my technical accounting research class and in recent consulting work, I often have been reminded of the need for reasoned judgment in our profession. With the general move toward more objectives-based standards (using the SEC parlance), the need for professional judgment only will increase.  Recognizing the need to teach and understand what professional judgment [...] Read more > >

Insurance accounting to change dramatically, but not really

In their joint meeting in Norwalk, Connecticut last month, the IASB and FASB affirmed an earlier decision that an “insurer should recognize all acquisition costs as an expense when incurred.  In addition, both Boards agreed that the insurer should not recognize a part of the premium as revenue (or income) at inception equal to the [...] Read more > >

Can IFRS produce global comparability?

I just read the abstract of a forthcoming paper (Kvaal and Nobes 2010) that compares the accounting policies of blue chip companies in the largest five stock markets that use IFRS. By comparing the policy disclosures in annual reports, the authors find “significant evidence that pre-IFRS national practice continues where this is allowed within IFRS.”  [...] Read more > >

SEC Concerned about Race to Bottom

The question of whether competition among standard setters leads to improved, high-quality reporting is an oft-debated topic and one that has come up on the FASRI research blog before (you can read the extensive commentary that topic induced here).  While academics might disagree, the SEC has already clearly voiced their concern about competition inducing a [...] 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 > >

The FASC's Comments on the SEC Roadmap

Last week, a revised version of “A Research Based Perspective on the SEC’s Proposed Rule on Roadmap for Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards (IFRS) by U.S. Issuers,” comments from the Financial Accounting Standards Committee of the American Accounting Association, appeared on SSRN.  In this post, I offer [...] Read more > >

The FASC’s Comments on the SEC Roadmap

Last week, a revised version of “A Research Based Perspective on the SEC’s Proposed Rule on Roadmap for Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards (IFRS) by U.S. Issuers,” comments from the Financial Accounting Standards Committee of the American Accounting Association, appeared on SSRN.  In this post, I offer [...] Read more > >

Cultural Differences and their Influence on Comparability

One of the goals of international convergence is harmonization of accounting standards and increased comparability in financial reporting. However, even with convergence financial reporting differences will remain across countries. Some differences will stem from fairly obvious and observable sources, like countries’ various legal environments. Other sources of financial reporting differences, like cultural influences, are likely [...] Read more > >

Competition: Not Enough for Convergence

In a recent article by Özgür Gürek, Bernd Irlenbusch, and Bettina Rockenbach entitled “The Competitive Advantage of Sanctioning Institutions” (published in Science in 2006), the authors study human institution-choice behavior and cooperative behavior in a setting where there is permanent competition between a sanctioning institution and a sanction-free institution.  In the sanctioning institution, subjects may [...] Read more > >