Program Accounting for Costs

The IASB/FASB recently affirmed an earlier decision not to rewrite standards on inventory cost accounting as part of its revenue recognition project.  Other than the limited guidance already covered in the proposed new standard (on topics such as setup costs for service contracts, precontract costs, and inventory of a service provider), the boards have left [...] Read more > >

Disclosure and the FASB

Not only will I be blogging about the Unit of Account / Disaggregation / Net vs. Gross / Whatever Words you Use, but I also will be posting about the FASB’s new disclosure project. So, what do you say when you teach your classes?? Probably what I say “oh yes and there are disclosures.. mumble [...] Read more > >

OCI Presentation Project Is the Tip of the Iceberg

The FASB just issued an accounting standards update concerning the presentation of comprehensive income.  Under prior guidance, companies can report comprehensive income in three ways.  The update eliminates one option – reporting the details of other comprehensive income in the statement of changes in stockholders’ equity.  The update continues to allow reporting in either a [...] Read more > >

Good Book versus Bad Book

No I am not going to do a book review on financial instruments. This is an interesting concept being considered as part of the financial instrument project. As many of you already know, the FASB is attempting to develop a single impairment model for financial instruments. In January, the Boards issued a supplementary document that [...] Read more > >

When did Standard Become a Noun?

Talk to an academic my age or older, and right along with “get off my lawn” you’ll hear comments like “kids these days never read anything published more than five years ago.”  This is often true in research (outside of doctoral seminars), but is even more true about standard setting. After all, how could something [...] Read more > >

Permanent and transitory earnings: where did we get these terms?

In 1957, the Princeton Press published Milton Friedman’s famous book, A Theory of the Consumption Function.  An interesting assumption underlying the theory is that “the transitory components of consumption and income can be taken to be uncorrelated with the corresponding permanent components and with each, other.” One of the key inferences is that permanent (smoothed) consumption [...] Read more > >

Boards Decide to Re-expose Revenue Recognition

In a press release issued today, the FASB and IASB announced their decision to re-expose the revenue recognition proposal. In their own words: It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the [...] Read more > >

Book well worth buying

I just got my copy of the FINANCIAL INSTRUMENTS: A comprehensive guide to accounting and reporting -2011 CCH publication, authored by Rosemarie Sangiuolo, Scott Taub, and Leslie Seidman. You might recall that last year I was struggling with the new accounting for convertibles and Scott Taub said he was revising the convertible instrument in this [...] Read more > >

Some Views from CFOs on Financial Reporting Issues

Grant Thornton recently issued a white paper that reports results of a survey (318 respondents) they conducted with some CFOs from both private and public companies (authors of the paper are John Hepp and Meredith Vogel). Notwithstanding the usual caveats that come with survey data, there are some interesting (and sometimes surprising) results reported in [...] Read more > >

Performance obligations: A new era.

A search of the FASB’s entire codification of accounting standards reveals only 8 references to the term “performance obligation,” with no definition.  The term does not appear in any current concepts statements.  Given it’s prominence in the exposure draft on revenue recognition, I expect that the term will become ubiquitous as the FASB-IASB convergence process [...] Read more > >

FASB Webcast on XBRL

In addition to their upcoming webcast on nonpublic entities (see this post), the FASB is also hosting a webcast on how to use the XBRL 2011 US GAAP Financial Reporting Taxonomy. The webcast will take place on Wednesday, June 22, 2011 from 1:00–2:00 p.m. EDT. Details available here. Read more > >

Unit of account continued…

I’ll be regularly blogging on unit of account / disaggregation / net vs. gross etc. Recall a prior post where I mentioned how my head spins when I think of these concepts that are not clearly defined. Perhaps through this blog, we can make some headway on keeping these concepts distinct. Today’s blog will be [...] Read more > >

Critique of potential IFRS monopoly

I just read an insightful, if not provocative, paper on the shortcomings of a potential IFRS monopoly. The paper entitled, “IFRS Monopoly: The Pied Piper of Financial Reporting,” is written by Shyam Sunder of Yale University, and I recommend it to anyone who wants to form a balanced opinion about whether the US should adopt [...] Read more > >

Roundtable Bleg

According to Bloglossary, To bleg is to write a blog entry or comment for the sole purpose of asking for something. Today, I am asking for input on what roundtable speakers you would like to see over the coming academic year.  As I indicated in Reimagining FASRI, we will be planning roundtables to serve three [...] Read more > >

Structured finance and the if-converted EPS dilution computation

This post starts with class materials, but ends with some questions for researchers.  As I was writing my EPS case for Intermediate II this spring, I ran into a kind of strange problem.  I picked 4 or 5 companies with convertible debt and fairly sizable dilution effects.  I then went to their EPS footnote to [...] Read more > >

Reimagining FASRI

The last couple of weeks have been busy ones behind the scenes at FASRI.  Last week, Phil Shane (current research fellow), Lynn Rees (incoming research fellow) and I met with the FASRI Steering Committee (FASB Board Member Tom Linsmeier, FASB Senior Advisor Jim Leisenring, Research Director Ron Lott, and Technical Director Susan Cosper).  Yesterday, the [...] Read more > >

What does $180 buy you?

The answer is: A LOT! For $180, you can attend two half day sessions on Sunday at the AAA in Denver digesting all of the latest scoop on revenue recognition, leasing, pensions, and other big ticket items. Tom Linsmeier from the FASB and Pat McConnell of the IASB lead this session, giving you both US [...] Read more > >

Some observations from recent Round Table

Last Wednesday, I enjoyed our most recent FASRI Round Table.  Ben Couch discussed the new guidance for making Fair Value Measurements (hereafter, FVM) as well as the new disclosures about FVM.  Part of the discussion centered distinguishing between level 2 and 3 measurements.  For a FVM that uses some market information, how does the accountant [...] Read more > >

Unintended positive consequences of FAF’s Post-Implementation Review Initiative?

The FAF described its new Post-Implementation Review (PIR) initiative, whereby a team created within the FAF will systematically review existing standards to assess the extent to which they accomplished their originally-intended objectives. I personally think that this is a valuable initiative and that it appears to be well-designed. A thought that I had in listening [...] Read more > >

Round table on Level 2 and level 3 fair valuation and ASU 2011-04

Update: Here are two slide decks related to the session described below:  First click on “Read more” below and then click here for the first slide deck. First click on “Read more” below and then click here for the second slide deck. Unfortunate technological difficulties prevented us from recording the session.   The FASRI Round [...] Read more > >