Revenue Recognition Exposure Draft Exposed

The FASB and IASB released their exposure draft of their proposed revenue recognition standards. From paragraphs IN8 and IN9 of the official document In summary, the core principle [of revenue recognition] would require an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration [...] Read more > >

Low hanging fruit for experimentalists

Read my post from a few days ago on convertible debt. This topic of hybrids has long seemed like low-hanging fruit to me especially for experimentalists who can create conditions that don’t exist in the real world (which is probably what you would need to do for this topic). Any experimentalists out there who understand [...] Read more > >

Help me please…

FROM FORD MOTOR CO.’s 2009 financials. Convertible Debt Instruments. We adopted the FASB’s new standard on accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) on January 1, 2009. The standard specifies that issuers of convertible debt securities that, upon conversion, may be settled in cash should [...] Read more > >

John Wilson Dickhaut, Jr., 1942-2010

Greg Waymire wrote this obituary for John Dickhaut, which will be forthcoming in Accounting Education News. Please feel free to share your thoughts or reminiscences in the comments. –RJB John Dickhaut passed away April 10, 2010 at his California home following a long and courageous battle with cancer. John was a widely respected member of [...] Read more > >

Manipulating relevance

As most FASRI followers are aware, the IASB and FASB are revising their Conceptual Frameworks.  The new and old frameworks posit that relevance of information for making decisions is a key attribute for determining if a particular number should be included in financial reports. Read more > >

Need good fair value cases

We had a financial reporting course coordination meeting today here at UT Austin. We have a concepts course followed by intermediate in all one semester course. We were lamenting on the lack of fair value class / case materials. I have 2 cases that Katherine Schipper wrote for a FASB conference. But that’s about it. [...] Read more > >

Did you see this one?

BANKERS GET OFF EASY… Read more > >

When the going gets tough, the tough take accounting.

I couldn’t resist. The title comes from the first line of today’s David Brook’s column in the New York Times. Read more > >

Discontinued operations anyone

I was busy trying to update my class for the fall here. It seems discontinued operations turn a turn backwards, is that right? Anybody else following this one? Last year, they were trying to make the “thing” (to get technical) that qualifies for discontinued operations treatment be larger than in the past (be a SFAS [...] Read more > >

This Just In from Air Traffic Control

**See bottom of post for a June 25 update.** After suffering through a 5-hour delay in Newark on Friday, it appears that I was not the only one about to be subjected to delay. Many of you have probably been wondering how the FASB and IASB were going to accomplish the monumental task of finishing [...] Read more > >

Press Coverage on Fair Value Proposal

Reactions to the recent Accounting Standards Update on financial instruments are rolling in.  Start with this one from Bloomberg/Businessweek: Banks including Bank of America Corp., based in Charlotte, North Carolina, and San Francisco-based Wells Fargo & Co. already report the fair value of their loans in the footnotes of their quarterly reports to regulators. Bank [...] Read more > >

FASB Issues Exposure Draft on Accounting for Financial Instruments

The FASB has just issued a long-awaited, and much-debated, Exposure Draft of a Proposed Accounting Standards Update (ASU) that would dramatically change the accounting for financial instruments. As noted in a press release (full text available here): Among other changes, the proposed ASU would seek to bring more transparency into financial statements by incorporating both [...] Read more > >

Round Table Hiatus

You probably noticed we haven’t had a round table for a little while. We will continue with this hiatus for at least a few more weeks, as I am traveling throughout much of June, and Jeffrey is making the transition back from Norwalk to civilian life. We’ll start up later in the summer, and plan [...] Read more > >

Do difficult-to-account for transactions deserve greater regulatory scrutiny?

Certain transactions are inherently difficult to account for. Investments in illiquid financial instruments may be impossible to value without heavy reliance on unverifiable assumptions from management. Transactions that include explicit or implicit rights of return must be recorded as sales or as a bundle of options, neither of which is quite accurate. Transactions with customers [...] Read more > >

Bob Herz on Repo 105

In case you haven’t already seen it elsewhere, the FASB website and Bob Herz’s testimony last Friday before the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises both contain Bob Herz’s earlier (April 19) letter to Congressman Barney Frank that discusses accounting standards and the Lehman Bankruptcy report.  Not surprisingly, I found it [...] Read more > >

Time is the Best Auditor

I was talking about a recent regulatory failure with my wife last night (yes, we talk about such things), and we agreed that the truth would surely come out eventually, as uncertainties resolved. That led me to utter the pithy remark “Time is the best auditor.” My wife asked “who said that,” and I realized [...] Read more > >

Why powerful people are (sometimes) better liars

In a May 2010 Harvard Business Review article, Dana Carney (assistant professor at Columbia University) answers questions about her research that examines the relationship between a sense of power and the ability to deceive others. Although I highly recommend reading the actual paper (which is very well written, I might add), let me summarize the basics [...] Read more > >

Good stuff…

IN THE MONEY: FASB Readies Proposal On Fair Value For Loans By Michael Rapoport A DOW JONES NEWSWIRES COLUMN 996 words 17 May 2010 15:27 Dow Jones News Service DJ English (c) 2010 Dow Jones & Company, Inc. NEW YORK (Dow Jones)–The battle over whether to expand the use of controversial “fair-value” accounting is about [...] Read more > >

And why aren't you…

Signed up to attend the FASB/IASB update on Sunday at the AAA in San Francisco. For the last many years, probably 10, i have attended and it’s a HUGE benefit to me in my teaching and research. I get up to speed in a very efficient way, and i hear it straight from those who [...] Read more > >

And why aren’t you…

Signed up to attend the FASB/IASB update on Sunday at the AAA in San Francisco. For the last many years, probably 10, i have attended and it’s a HUGE benefit to me in my teaching and research. I get up to speed in a very efficient way, and i hear it straight from those who [...] Read more > >