In teaching my Principles of Financial Accounting class last week, I stumbled across an observation I hadn’t noticed before. I explained to my students that as a business strategy to expand sales, companies offer a range of incentives to their customers: discounts for paying early, rights to return merchandise, warranties, and credit. However, I then [...] Read more > >
Deferred taxes are hard for most of us to think about .. who goes around thinking about the two sets of rules and then time differences. Two sets of differences – the human brain doesn’t do so well there. Some are trained to do this, so it probably comes easy to them, I suppose. Anyway, [...] Read more > >
The recent issuance of CON8 provides some fascinating insights into the the FASB and IASB think about the economic consequences of their standards. In 2008, the FASB and IASB wrote the exposure draft of what would become CON8 (“Exposure Draft of Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics and [...] Read more > >
The FASB just issued a discussion paper seeking responses to nine questions about the implementation (effective dates and transition methods) of standards developing from a list of 10 currently circulating exposure drafts, including revenue recognition, financial statement presentation, financial instruments, etc. You can see the full list with proposed effective dates and transition methods by going to the FASB website [...] Read more > >
The latest Statement of Financial Accounting Concepts (Number eight) reiterates the objective of financial reporting in the following terms: “Decisions by existing and potential investors … and … existing and potential lenders … depend on their assessment of the amount, timing, and uncertainty of (the prospects for) future net cash flows …” (p. 1-2, par. [...] Read more > >
The FASB Revenue Recognition team has graciously provided us with power point slides which you may download prior to today’s round table discussion (at 4pm Eastern time). Click here to download the slides, and click here for more information on today’s round table including how to tune in. Note: If you’re still on the screen [...] Read more > >
Last week Danielle Zeyher joined us for a round table discussion of the FASB’s latest exposure draft on lease accounting. If you haven’t clicked on “more” at the bottom of the first page of this post, do so now. If you’d like to hear the audio of the leases session, click here. If you’d like a [...] Read more > >
Amazon.com.. in their 2009 income statement .. The company puts “equity-method investment activity, net of tax” below provision for taxes (in the place that you’d expect to see discontinued operations). I have not seen that kind of presentation before. Anybody have any insights? Read more > >
A few weeks ago, I wondered why some academics were suggesting that the IASB and FASB compete when almost everyone else is suggesting that they work together. A recent news release from the FASB got me thinking about this in a different way. When I was a Research Fellow at the FASB, I had several [...] Read more > >
At 4pm Eastern time on Tuesday, 10/19/2010, we will have our third roundtable for this academic year. Please join us! See the new FASRI Roundtables WebPage describing how to use VenueGen, our new platform from which you can join the Roundtable discussion. FASB staff members, Kenny Bement, Libby Biittner and Liz Gagnon, will join us to discuss [...] Read more > >
On Friday, I asked a tax colleague whether anybody had examined the issue of how the market values DTA’s and DTL’s from fair value accounting? I got a “sort of” answer that didn’t sound too convincing. I was thinking that this is a low-hanging fruit kind of project. That is, many companies (well certain industries [...] Read more > >
On Friday, I asked a tax colleague whether anybody had examined the issue of how the market values DTA’s and DTL’s from fair value accounting? I got a “sort of” answer that didn’t sound too convincing. I was thinking that this is a low-hanging fruit kind of project. That is, many companies (well certain industries [...] Read more > >
Although the FASB is going to converge with IASB on the notion of short-term and long-term (12 months and that’s that) .. and so this murder mystery will go away … i would like to see what anybody knows about this issue right now. The issue is what is current (or long term) depends on [...] Read more > >
Thanks to Danielle Zeyher, FASB project manager, and all who participated in a lively and informative FASRI round table on proposed new lease accounting standards. The FASB and IASB are preparing what could be a giant step that would bring more than $1 trillion of debt onto balance sheets of public U.S. companies alone (e.g., The Analyst’s Accounting Observer, [...] Read more > >
Just a quick reminder that you can tune in to the leases round table today at 4pm eastern time. Danielle Zeyher, FASB’s manager of the leases project, will be with us to discuss the key differences between current GAAP and the new accounting policy proposed in the currently circulating exposure draft. We will also focus on how [...] Read more > >
I used the 2009 Microsoft financial statements in class yesterday (well just the balance sheet and contractual obligations footnote). Interesting item on the balance sheet- securities lending payable. Maybe I missed it but the footnotes were pretty bare on discussing this. My understanding of this transaction is that the company (in this case, Microsoft) will [...] Read more > >
Accounting for financial instruments has been a tough issue for a long time, and the recent financial crisis has heightened concerns. My guess is that a number of academics are working on research projects related to accounting for financial instruments. In many cases, I bet the authors would like a convenient document they could cite [...] Read more > >
The Financial Accounting Standards Board continued making progress on its Conceptual Framework Project by issuing a new concept statement earlier this week. The Conceptual Framework Project is a joint effort with the IASB, aimed at producing a signal framework that both Boards could use in developing (ideally converged) standards. This new concept statement, SFAC 8, [...] Read more > >
Bob Lipe brought up the Kothari, Ramanna and Skinner paper presented at last year’s JAE Conference. I’m pining today because I am unable to attend this year’s conference (typically one of my favorites), so I will console myself with commenting on their revision of the KRS paper. I am hoping the authors will reconsider these [...] Read more > >
One of the frequent criticisms the revenue recognition project has received in the past few years is that the proposed new standard would change revenue recognition in areas that do not seem to pose any problems today. One example of that is the construction industry, where the proposed new standard has the potential to change [...] Read more > >