Boards Decide to Re-expose Revenue Recognition

In a press release issued today, the FASB and IASB announced their decision to re-expose the revenue recognition proposal. In their own words: It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the [...] Read more > >

Some Views from CFOs on Financial Reporting Issues

Grant Thornton recently issued a white paper that reports results of a survey (318 respondents) they conducted with some CFOs from both private and public companies (authors of the paper are John Hepp and Meredith Vogel). Notwithstanding the usual caveats that come with survey data, there are some interesting (and sometimes surprising) results reported in [...] Read more > >

Performance obligations: A new era.

A search of the FASB’s entire codification of accounting standards reveals only 8 references to the term “performance obligation,” with no definition.  The term does not appear in any current concepts statements.  Given it’s prominence in the exposure draft on revenue recognition, I expect that the term will become ubiquitous as the FASB-IASB convergence process [...] Read more > >

Critique of potential IFRS monopoly

I just read an insightful, if not provocative, paper on the shortcomings of a potential IFRS monopoly. The paper entitled, “IFRS Monopoly: The Pied Piper of Financial Reporting,” is written by Shyam Sunder of Yale University, and I recommend it to anyone who wants to form a balanced opinion about whether the US should adopt [...] Read more > >

Structured finance and the if-converted EPS dilution computation

This post starts with class materials, but ends with some questions for researchers.  As I was writing my EPS case for Intermediate II this spring, I ran into a kind of strange problem.  I picked 4 or 5 companies with convertible debt and fairly sizable dilution effects.  I then went to their EPS footnote to [...] Read more > >

Some observations from recent Round Table

Last Wednesday, I enjoyed our most recent FASRI Round Table.  Ben Couch discussed the new guidance for making Fair Value Measurements (hereafter, FVM) as well as the new disclosures about FVM.  Part of the discussion centered distinguishing between level 2 and 3 measurements.  For a FVM that uses some market information, how does the accountant [...] Read more > >

Round table on Level 2 and level 3 fair valuation and ASU 2011-04

Update: Here are two slide decks related to the session described below:  First click on “Read more” below and then click here for the first slide deck. First click on “Read more” below and then click here for the second slide deck. Unfortunate technological difficulties prevented us from recording the session.   The FASRI Round [...] Read more > >

New Goodwill Impairments Exposure Draft and 10b5 exposure

Is anyone aware of 10b5 shareholder litigation due to delayed recognition of goodwill impairment?  At least two working papers imply that firms expose themselves to such actions when they delay the recognition of goodwill impairment.  The first working paper, by Muller, Neamtiu and Riedl, suggests that insiders knowingly sell stock prior to the firm recording [...] Read more > >

Does the FASB have a balance sheet perspective?

Implicit in the FASB’s conceptual framework is a balance sheet (rather than an income statement) perspective. This has nothing to do with the relative decision usefulness of balance sheet vis-à-vis income statement information. Instead, it is the result of a decision (which I agree with) to define income in terms of changes in net assets. [...] Read more > >

Botosan & Plumlee disclosure-related research round table

UPDATE:  Here are two files for the roundtable:  a 2006 review paper by Christine Botosan called “Disclosure and the Cost of Capital:  What Do We Know?” and  recent working paper on voluntary environmental disclosures by Plumlee, Brown, Hayes and Marshall. The FASRI Round Table series continues at 4pm Eastern time on Wednesday, April 6th. Rob Bloomfield, [...] Read more > >