“Must Reads” in the Earnings Management Literature

We had a great Round Table with Paul Zarowin yesterday, where we talked about the large and ever-growing literature on earnings management.  While much has been done in this area, it was clear from yesterday’s discussion that there remain many fruitful areas for future research.  If you didn’t get the chance to join us, I [...] Read more > >

Great article by Floyd Norris

My colleague John McInnis at Texas alerted me to this article. Very good stuff.   I wonder how much will come back on the balance sheet with the new rules that go into effect in Q1 of 2010.  I have read that Citibank expects (don’t have figure handy) a relatively small portion to come back on [...] Read more > >

Measuring Value-Added as a Revenue Recognition Approach

I’ve been thinking about something Jeff Wilks said during this week’s FASRI Roundtable and something that occurred to me during the conference.  In short, it is the notion that it might be useful to consider perspectives other than the customer consideration model for revenue recognition.  (Forgive me, Jeff, if I misunderstood your comments Wednesday, and of [...] Read more > >

Round Table Discussion on Earnings Management Research

On Tuesday, Dec 15th, 4 pm ET, we will be joined by Paul Zarowin. Paul Zarowin is a professor at New York University and an Editor at The Accounting Review. The topic of this session is earnings management, and Paul is going to provide us with a high level review of this literature and the [...] Read more > >

Deontology and Consequentialism in Standard Setting

How often do we get to use big esoteric words from philosophy when we are talking about accounting standards?  Not often enough! Usually, the only philosophical terms we use are ‘normative’ and ‘positive,’ and I think many of us are pretty comfortable with the notion that standard setters are trying to answer normative questions (what [...] Read more > >

FASB/IASB Conference takeaway

Having recently attended the FASB/IASB issues conference on revenue recognition, leasing (lessor), and insurance, I was struck by how terminology gets in the way.  For example, figuring out what “unit of account” might mean seems to be something many debates were centered around … yet there’s not a definition of this notion.  So much of [...] Read more > >

Leasing: Is it a Good or a Service?

We have already had a couple great posts on the FASB/IASB Financial Reporting Issues Conference by Ray and Rob.  I’d like to add a comment on something that struck me over the weekend. One of the important issues in revenue recognition is the question of whether a company is providing a good or service in [...] Read more > >

Business Models, Intent and Revenue Recognition

Are you comfortable with allowing management to choose whether to recognize unrealized gains or losses based on management’s intent to hold securities to maturity?  How about basing the timing of revenue recognition on the firm’s business model?  Differences in intent and business models might very well alter what information users find relevant.  However, intent and [...] Read more > >

Anticipation and the Conceptual Framework

One issue that came up repeatedly for me at this weekend’s FASB-IASB reporting issues conference was that of the apparent clash between the objective to provide relevant information through financial reports and the objective to maintain consistency with the conceptual framework’s definitions of assets and liabilities. An example illustrates the nature of the problem: consider [...] Read more > >

Round Table: Funding Opportunities for Research on Revenue Recognition

As posted here, FASRI is issuing a call for research consultants to conduct revenue recognition studies.  This call is a little different from the usual ‘call for proposals’ because applicants must be willing to work closely with FASRI and FASB staff to identify research topics that will be most helpful in staff and Board deliberations.   [...] Read more > >

Call for Research Consultants: Revenue Recognition

The Financial Accounting Standards Research Initiative (FASRI) is issuing an open call for academic researchers to serve as Research Consultants for a Revenue Recognition Research Project.  Research consultants will work with members of FASRI to develop rigorous research studies likely to be helpful with the FASB and IASB deliberations on revenue recognition and related topics.  [...] Read more > >

An Option Play

Sorry for the light blogging, but I have been preparing for the upcoming Financial Reporting Issues Conference.  As always, the cases are a real challenge.  Here are a few questions to ponder: If I write an option, can it possibly be an asset?  Before you instinctively answer “of course not” (after all, you have given [...] Read more > >

Round Table Discussion: Patrick Finnegan, IASB Board Member

On Tuesday, Dec 1st, 4 pm ET, we will be joined by Patrick Finnegan, who was recently appointed to a 5-year term on the International Accounting Standards Board. Pat is a former Director of the Financial Reporting Policy Group at CFA Institute Centre for Financial Market Integrity, where he led a team responsible for providing [...] Read more > >

Tribalism in Science

You are probably aware that someone has (apparently illegally) published email correspondence involving climate scientists at the University of East Anglia.  This prompts me to think of writing two posts.  Later on, if I get the courage, I will write a post about how we deal with messy data — the emails discussing the matter [...] Read more > >

2009 FASB-IASB Financial Reporting Issues Conference

For most of this decade, the Financial Reporting Issues Conference has been my favorite accounting event of the year.  Taking a Bayesian perspective, I also view it as the most informative:  every year, what I learn changes my beliefs more than any other conference. I will be writing some posts about the substance of the [...] Read more > >

At Least ONE Academic Supports the Perlmutter Amendment

When the AAA-FASC committee wrote a letter opposing the Perlmutter Amendment, I asked “Are there any academics who would support such a proposal?” It turns out the answer is yes:  David Albrecht of Concordia College, and author of the blog The Summa (as in the book by Brother Luca Pacioli, father of double entry bookkeeping).  [...] Read more > >

More Washington work for FASB

The Perlmutter amendment that would allow a regulator to set GAAP is getting a lot of press.  But Congress members have more work in mind for the FASB.  Representative Scott Garrett has proposed an amendment that requires the FASB to study the economic effects of its recent securitization rules (FAS 166 and 167).  Apparently, Garrett [...] Read more > >

FEI Hosts Issues Conference in NYC

FEI just held their 28th Current Financial Reporting Issues Conference in NYC. Lots of big names in financial reporting were on the schedule, including several high-level representatives from the FASB and the SEC. You can read about some of what was said at the conference on the FEI blog (here and here).  Lots of interesting [...] Read more > >

New Support and Opposition on Perlmutter Amendment

We reported last week on the Perlmutter amendment.  In the typically understated fashion of accounting professors, the AAA-FASC wrote a letter opposing it. Such an amendment would shift the power to promulgate accounting standards from the Financial Accounting Standards Board (FASB) to a Systemic Risk Oversight Council, and it would shift the objectives of financial [...] Read more > >

Why Publish in a Third-Rate Journal When You Can Publish in a First-Rate Blog?

That was just one of the many comments made by first-rate blogger Tyler Cowen of George Mason’s Economics Department, and author of Marginal Revolution (listed by the WSJ as one of the top 25 economics blog), during our phone conversation last week. Tyler is just one of many bloggers at GMU, which is taking a [...] Read more > >