Financial Accounting Standards Research Initiative

UPDATE:  Audio of the Roundtable is here. The FASRI Round Table series continues with a session at 4pm Eastern on Wednesday, March 23rd.  Robert Bushman, professor at the University of North Carolina, will tee up a discussion related to his research that will hopefully impact the FASB's developing disclosure framework project.  Click here for a research paper to read [...] Read more > >

The audio podcast for the disclosure framework roundtable is available here. As a bit of personal commentary, I find it interesting to think of a comprehensive disclosure framework in the context of the recent research on textual analysis, in which researchers use computer programs to process the non-financial/non-tabular content of annual reports, other SEC filings and [...] Read more > >

Please click on "more" below and then click here for the slides that Akwasi Ampofo (project manager) will use to introduce us to the FASB's Disclosure Framework project, the topic of this week's Round Table discussion.  The Round Table will begin at 4pm Eastern on Wednesday, February 23rd.  Please click here for up-to-date information regarding Board and staff deliberations regarding this [...] Read more > >

The FASRI Round Table series is about to start up again with our first session taking place at 4pm Eastern on Wednesday, February 23rd.  Akwasi Ampofo, manager of the FASB's disclosure framework project will help us kick off a series of round tables dealing with the topic of disclosure.  Akwasi will introduce some of the [...] Read more > >

The FASRI Round Table series is about to start up again with our first session taking place at 4pm Eastern on Wednesday, February 23rd.  Akwasi Ampofo, manager of the FASB’s disclosure framework project will help us kick off a series of round tables dealing with the topic of disclosure.  Akwasi will introduce some of the [...] Read more > >

In my MAcc program I took a course on accounting standards and research. Our textbook: the FASB Codification. I thought the approach was great! We had free student access to the codification and learned how to use it to find answers to technical questions. It seems like that idea is becoming quite common in accounting programs [...] Read more > >

Last December Paul Beswick spoke to the AICPA. Among other things he addressed IFRS convergence. In our October update we highlighted that the majority of jurisdictions are following either a convergence or an endorsement approach. In my opinion, if the U.S. were to move to IFRS, somewhere in between could be the right [...] Read more > >

A couple of days ago the FASB issued a proposal to limit netting/offsetting. The proposal is similar to the IASB’s current approach. Therefore, if it is finalized, companies in the United States would not be allowed to offset as many assets and liabilities (especially derivatives) as they do now, meaning larger balance sheets. David Zion and [...] Read more > >

The State of Maryland has recently passed a law that allows the creation of for-profit “benefit” corporations that include in their charter a commitment to pursue goals other than profit maximization.  As the Washington Post reports: These hybrid entities pay taxes and can have shareholders, without the risk of being sued for not maximizing profits. Companies [...] Read more > >

Mark DeFond of the University of Southern California presented a paper here at UT-Austin last week. It is neat as it deals with a basic concept .. that is, comparability. HOW FUNDAMENTAL IS THAT? EXACTLY! VERY. Title of paper: The Impact of Mandatory IFRS Adoption on Foreign Mutual Fund Ownership: [...] Read more > >

From the Telegraph, and quoted without comment: Iain Richards, of Aviva Investors, told the Lords that the IFRS system of auditing the banks had had “a material cost to the taxpayer and to shareholders” because “as a result dividend distributions have been made and bonuses have been paid that were imprudent”. Mr Richards said: “The IFRS (system) [...] Read more > >

From the FASB website: Financial Accounting Foundation Appoints Daryl E. Buck and R. Harold Schroeder to the Financial Accounting Standards Board Norwalk, CT, January 14, 2011—The Financial Accounting Foundation (FAF) today announced the appointments of Daryl E. Buck and R. Harold (Hal) Schroeder to the Financial Accounting Standards Board (FASB). Mr. Buck is currently Senior Vice President [...] Read more > >

JP Morgan sent around a report on a change in pension accounting at Honeywell last November.  Honeywell had been following the traditional procedure of amortizing any accumulated pension gains or losses that lay outside of the corridor over the average remaining service life of employees.  The company decided to stop amortizing – any gain or [...] Read more > >

In theory the PCAOB Board is made up of 5 members, with staggered 5-year terms. In practice . . . still working on that staggering bit. The SEC recently appointed James Doty as a PCAOB board member and as the new Chairperson. Daniel Goelzez, who has been acting chairman since Mark Olson [...] Read more > >

Many papers have been written on the “kink” in the earnings distribution, which exhibits surprisingly few small negative realizations, and surprisingly many realizations at or just above zero.  Let the financial reporting researchers argue about whether the kink is statistically robust or whether it reflects earnings management (operational or otherwise).  Managerial accountants Indjejikian, Matejka, Merchant [...] Read more > >

Happy New Year!  I’m back to blogging after a holiday hiatus, with a pointer to this article addressing the title question.  The author, a law professor, says no.  I say yes.  If you think of evaluating a paper as an audit, knowing something about the author’s motivation is part of the inherent risk assessment, and [...] Read more > >

We have a unique opportunity to (hopefully) have some impact on the future of standard setting. The IFRS Foundation oversees the International Accounting Standards Board. The Foundation has issued a call for comments on its strategy review. Click here to see comment letters received to date and instructions for submitting a comment letter. This provides an [...] Read more > >

Never try to come up with research proposals while opening presents on Christmas morning . . . unfortunately, I came to this knowledge a couple of days too late. So, here are some things to consider: Does Santa’s fiscal year end on Dec 25? If so, when does he conduct his annual inventory count? If not, does he [...] Read more > >

I am happy to report that I just finished my first semester of the PhD program, including the dreaded “Microeconomics for Econ PhDs.” As I look back on the semester, I thought, why micro? Why is microeconomics so important for accounting researchers that almost every PhD student is required to take it in their first semester. [...] Read more > >

I’ll take a crack at answering my own questions in the liabilities case posted on Dec. 9, 2010.  I hope there are some graders out there! Initially record cash and a liability. As corn is produced record an asset (corn inventory). At the end of each accounting period, mark the corn inventory to market and recognize income. [...] Read more > >