Financial Accounting Standards Research Initiative

Yesterday’s roundtable recapping the FASB’s 2010 Financial Reporting Issues Conference got me thinking more about defining elements of financial statements, particularly a liability. I’m interested to know whether you can answer the following questions in a way that is consistent with your conception (or the FASB’s conception) of a liability. In any case, this (or something [...] Read more > >

Did you know that you can watch the FASB board meetings live? There’s one today at 10:15am (ET). Learn more here. Read more > >

Our next round table will be Wednesday, December 8, from 4-5 pm ET. In that session, we will be going over some of the topics and discussions from the 2010 FASB/IASB Financial Reporting Issues Conference, which will be held this weekend in Norwalk, CT. As discussed on the conference website, the objective of this year's conference [...] Read more > >

Yesterday the PCAOB announced that they are seeking applicants for an academic fellow for the 2011-2012 academic year. Read more > >

Accountability has been defined as, “responsibility to someone or for some activity.” Almost without fail, when I think of accountability in the realm of financial reporting, I think of the principal-agent relationship. The agent (company management), is responsible to the principal (shareholders) for firm performance. Thus, one of the primary goals of financial reporting is [...] Read more > >

The FASB and IASB have at least four major projects expected to result in new accounting standards sometime next year: Fair Value Measurement, Financial Instruments, Leases, and Revenue Recognition. The user community is understandably interested in the effects that these standards will have on earnings and other information reported in 10-Ks and 10-Qs.  Users know that [...] Read more > >

Are you familiar with Research in Accounting Regulation, an Elsevier Journal?  Editor-in-Chief Gary Previts and Manuscript Editor Stephen Moehrle have put together an issue worth looking at.  The lead article by Holhbeck and Warfield analyzes the attributes of recent accounting standards, and Greg Jonas, along with Stephen Moehrle and Jennifer Reynolds-Moehrle summarize academic research published [...] Read more > >

Twin goals of FASRI are helping researchers to understand standard setters and to communicate complex research findings in a way the standard setters can understand.  Part of the challenge is knowing how to read and write.  Here is a bit of advice on each one. How to Read. There is an old Jewish saying: According to Rabbi Bunim [...] Read more > >

A colleague of mine and I are not on the same page as to what happens in the following case — who can help us? BONDS callable by the holders … a call window is coming up in the next year. Interest rates are down so unlikely to be put back to the company by [...] Read more > >

UPDATE:  AUDIO FOR THE SESSION IS HERE. Our next FASRI roundtable is scheduled for 4pm-5pm ET Wednesday, November 17th.  Richard Frankel (Washington University) will be joining us to talk about his recent paper, Panacea, Pandora's Box, or Placebo: Feedback in Bank Mortgage-based Security Holdings and Fair Value Accounting.  The paper continues several themes that FASRI roundtable [...] Read more > >

I really enjoyed the Political Economy roundtable last week hosted by Jeremy Bertomeu and Bob Magee (audio is available if you missed the session).  I am unsure if I understand all of the moving parts in the analytic model, but many of the parts make intuitive sense.  The insight that popular opinion about the quality [...] Read more > >

Over the course of my career, I have to admit that I’ve paid little attention to the scope paragrahs of financial accounting standards. Lately, I’ve been thinking that this might be the best place to look for a conceptual framework. In other words, how broad a (principles-based) framework would we need to alleviate the need for [...] Read more > >

For anyone who teaches M&A material in their classes, this is a great article just written by Jonathan Weil. Bank of American paid a lot for Countrywide. There was a massive amount of goodwill in that transaction. However, while everything else is in the dumps, the goodwill still lingers in an untouched [...] Read more > >

The audio recording of our discussion on the political economy of standard setting is available here.  At the end, I emphasized that there are some opportunities for empirical work, and the benefit of theory is to provide a framework for knowing what data to collect and how to interpret it. To see the possibilities, take a [...] Read more > >

As announced on Oct 29, 2010, the SEC released its first progress report on the Work Plan which will lead up to the Commission’s decision in 2011 on whether and how to incorporate IFRS into the US financial reporting system. Much of the progress report is dedicated to explaining what the SEC staff is doing to [...] Read more > >

Lisa Koonce asked a question about a particular company’s accounting the other day.  Now it is my turn.  As you probably heard, Apple early adopted some new revenue guidance that allows them to recognize the bulk of IPhone revenue at delivery rather than over the subsequent 24 months.  The early adoption required retrospective adoption, so [...] Read more > >

One of my current “traditional” masters students in accounting (traditional = comes in for a one-year degree only, having gotten a bachelors degree elsewhere) is a 35 year old fellow with a law degree from U of Iowa… worked at the bankruptcy court in St. Louis. Really bright fellow who looked like he thought [...] Read more > >

UPDATE:  The Audio for the discussion is available here. One reason I was sad to miss this year's JAE conference was that I didn't have the chance to hear comments on "From Low-Quality Accounting to Financial Crises:  Politics of Disclosure Regulation Along the Economic Cycle", by Jeremy Bertomeu and Bob Magee. From the abstract: This paper models [...] Read more > >

After clicking on “more” at the bottom of the first page of this post, click HERE for the audio of the revenue recognition round table. You can also see the slides by clicking HERE. Read more > >

You have to admit, it’s been a tough year for the FASB . . . Mark to market criticisms, convergence projects, Bob Herz retiring . . . I’ve been impressed with their stalwart effort notwithstanding all the bumps in the road. I just read in an FEI blog that the FASB decided to remove financial statement [...] Read more > >