Policy Research in an A-or-Nothing World

How many of you work for a university that only values “A-hits”?  To the non-academics, this mean that a publication in one of 3 or so top journals counts as meeting the research expectations placed on the faculty member.  Publication(s) in other journals do not count.  Recently, my institution elevated the value of A-hits, but [...] Read more > >

The Magical Number Seven

I’m not trained in behavioral economics, but I recognize the potential that this research methodology can have on standard setting.  Recently, the Miller paper was informally discussed among some FASB staff as to whether it might have implications for the FASB’s disclosure framework project.  That discussion is the impetus for this post, which requests information [...] Read more > >

Roundtable: International Convergence Part II

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Updates from the FASB meeting on the Disclosure Framework Project

On August 24, the FASB held a meeting which included a discussion on the disclosure framework. The disclosure framework project has been broken up into three parts: a decision process for disclosures related to financial statement line items, a decision process for disclosures about the general entity, and a decision process for disclosures related to [...] Read more > >

The IASB and Academics

I am not so sure how the IASB and its governing foundation view academics, and I wonder what this portends for future standards if the IASB ascends to the role of chief standard setter for the world.  A few recent events send positive signals. First, at the AAA meeting, I attended a session in which [...] Read more > >

Roundtable: Russell Golden, FASB Board Member

The FASRI Round Table series continues at 4pm Eastern time on Tuesday, August 30. Rob Bloomfield and Lynn Rees will moderate the session, and our guest speaker is Russell Golden, a FASB Board Member.  Russell was appointed to the board last October, and has been affiliated with the FASB serving in various positions since 2004.  [...] Read more > >

Annual report readability and analyst following

A recent paper published in The Accounting Review caught my attention. The paper is entitled, “The effect of annual report readability on analyst following and the properties of their earnings forecasts,” and is written by University of Michigan researchers Reuven Lehavy, Feng Li, and Kenneth Merkley. Readability is measured using the Fog index, which is [...] Read more > >

Amortized Cost or Fair Value?

As the financial instrument project moves ahead, the timeline shows a final accounting standards update is to be issued in the fourth quarter, many may think there are not really many changes from the old SFAS 115. The current proposal will still have financial assets measured at amortized cost and at fair value with unrealized [...] Read more > >

Does Revenue Cause a Firm’s Wealth To Rise?

I have been spending most of 2011 immersed in managerial accounting as I completely rework my course on that topic from the ground up.  This has led me to rethink the Conceptual Framework as well.  One of the most striking differences between the managerial accountant’s and financial accountant’s approaches seems to be that the former [...] Read more > >

Update on disclosure

Last week, the FASB held an education session on the Disclosure Framework project. They continue to view disclosure categories as: entity-wide disclosures, line-item disclosures, and disclosures related to conditions not recognized in the financials with related subcategories. This session centered on the goals of the project and developing qualitative principles. There is also a coordination [...] Read more > >

AAA Observations on Conceptual Framework

The AAA meeting in Denver had a number of interesting panel sessions.  One that I found enlightening concerned financial reporting and the financial crisis.  The panelists were Greg Waymire, Mary Barth, and Shyam Sunder.  I was not sure what to expect.  The punchline was that none of the panelists felt financial reporting was a prime [...] Read more > >

International Convergence

The deadline for the SEC to make a decision on whether or not to accept IFRS for domestic issuers is drawing near.  Obviously, this is an important decision that will have tremendous implications for accounting educators and the FASB.  In a recent speech in China, Hans Hoogervorst, the new Chairman of the IASB, commented that [...] Read more > >

Blood Minerals

We have all heard of the Leonardo DiCaprio film Blood Diamond, a story that revolves around a rare gem coming from a conflict-plagued nation.  The SEC is poised to require U.S. public companies to make disclosures about their use of blood minerals (my term, not theirs).  A CFO article reports that “the Dodd-Frank financial reform [...] Read more > >

Have accounting standards caused a decline in “matching” over time?

Many accounting academics think that matching expenses to their associated revenues produces an earnings pattern that is useful to decision makers. As a result, these academics think that any decline in matching will produce less useful earnings information for financial statement users. Along these lines, a recent study by Dichev and Tang (2008) in The [...] Read more > >

Say on pay

Accounting disclosures are meant to inform investor and creditor decisions but inherent in that goal is the ability to influence those decisions. Proponents of including conservatism in SFAC 8 would argue that neutrality can never truly be achieved because of this fact and management’s intentions. But then there are some disclosures meant to influence by [...] Read more > >

Speaking of Going Concerns…

In a prior post by Lynn Rees regarding fees assessed on health insurers, the issue turned on what it means to be a going concern.  Recently, Audit Analytics released a report on going concern trends.  You can get the highlights in this CFO article.  Interestingly, the number of new qualifications is down again this year.  [...] Read more > >

Accounting for Government Fees

One objective of this blog is to push out to the academic community decisions made by the FASB.  Recent Acts of Congress (Health Care and Education Reconciliation Act) has resulted in additional fees levied on health insurers.  How companies should account for these fees is the topic of the most recent Accounting Standards Update (ASU), [...] Read more > >

What Standard Setters Wish Researchers Knew (Better)

At the upcoming American Accounting Association 2011 Annual Meetings, I have organized a panel session in which Bob Herz, Mary Barth, Jim Leisenring, and Tom Linsmeier will respond to questions and give guidance on what they think researchers can do to provide more useful input to financial reporting standard setters. The panel is scheduled for [...] Read more > >

Beliefs and uses of disclosed information … revisited

In my previous post on proposed auditor communication changes, Lynn Rees pointed out that there doesn’t seem to be a disclosure that investors don’t like. His post brought two things to my mind. The first was post from Rob Bloomfield a few months ago about how beliefs about hypothetical use and actual use of information [...] Read more > >

Proposed Leasing Standard to Be Re-exposed

This week, the FASB and IASB announced plans to re-expose their proposed standard on leasing. This project was, until late last year, slated to be finished in July 2011. However, given the majors changes that have been raised during redeliberations, the boards have concluded that they are likely to end up with a document that [...] Read more > >