Round Table Discussion on Information Risk and Fair Value

On Wednesday, April 14th, 11 am ET, we will be joined by Eddie Riedl (Harvard University). Eddie will discuss on-going research relating to fair value accounting. This will include a paper co-authored with George Serafeim (also of Harvard University), entitled “Information Risk and Fair Values: An Examination of Equity Betas.” He will both overview an [...] Read more > >

Decoupling: It's not just about banking

Back in December 2009, FASB Chairman Bob Herz called for ‘decoupling’ GAAP and Banking regulations. Doing so could enhance the ability of both the FASB and the regulators to fulfill our critical mandates. We can continue to work with independence and an unwavering dedication to market transparency; at the same time the bank regulators can [...] Read more > >

Decoupling: It’s not just about banking

Back in December 2009, FASB Chairman Bob Herz called for ‘decoupling’ GAAP and Banking regulations. Doing so could enhance the ability of both the FASB and the regulators to fulfill our critical mandates. We can continue to work with independence and an unwavering dedication to market transparency; at the same time the bank regulators can [...] Read more > >

Economics and Leasing

I think everyone would agree there are many reasons to enter a lease. However, I think we would all also agree that if the only reason to enter a lease was to obtain a certain accounting treatment then the accounting should be changed. Bill Bosco raised some very interest points related to the leasing industry [...] Read more > >

Taxes, Financial Reporting and the Law: Roundtable with Lil Mills

If you assumed that accounting standards wouldn’t get sucked into the highly charged health care debate, you guessed wrong! From the New York Times An association representing 300 large corporations urged President Obama and Congress on Monday to repeal a provision of the health care overhaul that prompted AT&T, Caterpillar and other companies to announce [...] Read more > >

Leasing Letters and Calculators

The great thing about people who represent an industry being affected by an accounting standard is that they are highly motivated to provide content.  Bill Bosco sent me a number of files for this week’s Roundtable.  The ELFA comment letter on leasing discusses both lessor and lessee accounting, and objects strongly to the notion that [...] Read more > >

Bill Bosco's Comment Letter to the IASB

Bill Bosco, who will be our speaker at today’s Roundtable, sent along the text of his comment letter on leasing to the IASB.  Here it is, in its entirety: Sir David Tweedie                                                                              July 12, 2009 Chairman IASB Dear Sir: I support the theory that operating lease obligations arising from material operating leases should be capitalized.  [...] Read more > >

Bill Bosco’s Comment Letter to the IASB

Bill Bosco, who will be our speaker at today’s Roundtable, sent along the text of his comment letter on leasing to the IASB.  Here it is, in its entirety: Sir David Tweedie                                                                              July 12, 2009 Chairman IASB Dear Sir: I support the theory that operating lease obligations arising from material operating leases should be capitalized.  [...] Read more > >

More social objectives in utility functions

On March 9, Scott Dyreng led a session on how social norms affect people’s behavior.  I made a post a few days later on the subject with a cite to work by Steve Huddart.  Yesterday I saw another example of how social objectives affect employee utility functions, but this one seems quite different. Adam Grant, [...] Read more > >

Industry Views on Leasing Standards: Bill Bosco leads March 31 Roundtable

The FASRI Roundtable this week (11am ET, Weds Mar 31, 2010) will be lead by Bill Bosco, a member of the IASB/FASB International Working Group on leas accounting, Principal of Leasing101, and long time member of the Accounting committee of the Equipment Leasing and Finance Association (ELFA), a trade association representing the $650 billion dollar [...] Read more > >

If you believe what you read in the scientific literature, you shouldn’t believe what you read in the scientific literature.

The paradoxical title of this post is quoted from this article in Science News about the inconsistent and often inappropriate use of statistics in academic research.  I would strongly recommend every accounting researcher read the article, make sure they understand the criticisms, and then promptly ignore most of them. The article emphasizes that statistical significance [...] Read more > >

Stephen Cooper, IASB Member & Former UBS Managing Director, Leads Roundtable

NOTE: THIS EVENT WILL BE RESCHEDULED, DATE TBD. After a two week Spring break hiatus (during which we faculty were all catching up on work, of course), FASRI returns with a Roundtable featuring Stephen Cooper, current IASB member and former Managing Director in the Equities business of UBS Investment Bank in London from 1997 to [...] Read more > >

Stephen Cooper, IASB Member & Former UBS Managing Director, Leads Roundtable

NOTE: THIS EVENT WILL BE RESCHEDULED, DATE TBD. After a two week Spring break hiatus (during which we faculty were all catching up on work, of course), FASRI returns with a Roundtable featuring Stephen Cooper, current IASB member and former Managing Director in the Equities business of UBS Investment Bank in London from 1997 to [...] Read more > >

NIKE and redeemable preferred stock..

Somebody asked me about Nike’s redeemable preferred stock. SFAS 150 is not my area of expertise really, but .. the question that came to me was “is this in the mezannine?” I understood that nothing was there anymore. This company (nike) seems to be putting it in the mezannine but not really .. they don’t [...] Read more > >

Those brits are just so humorous!

I just came across this and have listened only to part of the first series (of five) but it seems quite interesting (and humorous). http://www.bbc.co.uk/iplayer/episode/b00r401p/A_Brief_History_of_Double_Entry_Bookkeeping_Episode_1/ Read more > >

Lehman

My colleague here at Texas, John McInnis, just sent around an interesting email to the UT faculty. I thought I’d share it more broadly. He raises an interesting question..   The web is a abuzz with the release of the Lehman Brothers post-mortem by the Bankruptcy Examiner yesterday.  I wasn’t aware of potential accounting gimmicks: [...] Read more > >

Research on social norms and financial reporting

Part of Tuesday’s Roundtable with Scott Dyreng focused on how social norms might interact with accounting and financial reporting.  In the typed and voice chat, reference was made to a paper by Paul Fischer and Steven Huddart, titled “Optimal Contracting with Endogenous Social Norms” (American Economic Review, Sept 2008, 1459-75).  Read more > >

The Definition and Measurement of Liabilities

In class yesterday, I stumbled upon an interesting apparent inconsistency between accounting for pensions and the accounting for compensated employee absences, which I had taught several weeks ago. When teaching my students about accruing for vacation pay, I observed that it seemed that if we knew for certain that employees were likely to get a [...] Read more > >

Costs of Debt Covenant Violations — Roundtable with Scott Dyreng

Join us Tuesday, March 9 at 4pm when Scott Dyreng of Duke University discusses his recent research on the cost of violating covenants on private debt.  The key message of the paper is that firms are willing to pay extra taxes in order to avoid debt covenant violations.  The study uses a somewhat unfamiliar data [...] Read more > >

Follow up on March 2009 mark to market hearing

About a year ago (March 12, 2009) the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Entities held a hearing titled “Mark-to-Market Accounting: Practices and Implications.”  The Committee members directed several hours of fairly hostile questioning to FASB Chairman Bob Herz and SEC Chief Accountant Jim Kroeker.  If you have not seen [...] Read more > >