Financial Accounting Standards Research Initiative

Thanks to everyone who participated in yesterday’s Round Table event. Hope to see you next week. If you’d like more information on this Round Table and Eddie’s research, click here to see the post introducing the topic. Read more > >

A recent Journal of Accountancy article states that the SEC Chief Accountant Jim Kroeker would support the FASB’s cutting the number of convergence projects due for completion in 2011. Here’s one excerpt from that article: “June 30, 2011, is an arbitrary deadline and it’s not one that’s been put in place by the SEC or by [...] Read more > >

Don’t forget about the Round Table discussion tomorrow at 11am ET. You can read more about it here. Hope to see you there. Read more > >

John Cacioppo is one of my favorite authors. He’s here today at the U of Texas, speaking to the business school. I was reading some of his stuff and ran across this and found it to be quite insightful. Although he’s a psychologist, his thoughts speak to any discipline. I guess i [...] Read more > >

   Most bloggers are familiar with lots of examples of accruals management research.  We are also seeing studies on other sorts of financial reporting manipulations, including real earnings management or classification shifting.    The NY Times had an article which discusses the credit rating agencies and their role in the recent financial crisis.  In a move [...] Read more > >

Last week, FASB Chairman Robert Herz submitted a letter to Congressman Barney Frank, Chairman of the House Financial Services Committee, and Congressman Spencer Bachus, Ranking Minority Member, regarding accounting rules that were being used (or misused) by Lehman Brothers prior to its bankruptcy in 2008. The letter, which explains the relevant accounting guidance, was [...] Read more > >

According to the Financial Times, the most recent Senate financial regulation bill will require banks to spin off their derivatives operations because “The financial instruments are too inherently risky to be traded by companies benefiting from government guarantees.” Am I missing something? I thought the general bank strategy was to attempt to balance derivative holdings [...] Read more > >

A policy proposal floating around these days is to require banks to issue contingent convertible debt: MY [Mankiw's] favorite proposal is to require banks, and perhaps a broad class of financial institutions, to sell contingent debt that can be converted to equity when a regulator deems that these institutions have insufficient capital. This debt would be [...] Read more > >

The other day, a PhD student here at Texas asked me for an advanced accounting book that had deferred tax coverage in it. She’s a tax person and was wanting to re-fuel her knowledge of this area before she started her summer paper. I laughed and said good luck on that one! [...] Read more > >

Could AAA publications do this?  Submit to The Accounting Review, get rejected, but have your reports forwarded to a Section journal or Horizons for a decision there.  Read more about what the field of economics is doing here. Read more > >

It sure seems hard to account for revenue, leasing, derivative…you name it.  Well, let’s add insurance loss ratios to the list.  The only difference is that this is a Congressional matter, not (just?) financial reporting:  take a look here. Read more > >

The US Commodities Furtures Trading Commission has approved an interesting exchange: CHICAGO (April 16, 2010) –– Media Derivatives (“MDEX”) is pleased to announce that it has received approval from the U.S. Commodity Futures Trading Commission (“CFTC”) as a designated contract market. Media Derivatives will operate under the name The Trend Exchange® (“TrendEx”). TrendEx is the first [...] Read more > >

Over the course of the past few months, I’ve reviewed a number of books and papers that were nominated for the 2010 AAA Wildman Medal Award, which seeks to recognize papers that use rigorous research methods to deal with current issues in accounting practice. One of the nominated papers was entitled, “Consequences of GAAP disclosure [...] Read more > >

The Financial Accounting Standards Board (FASB) is pleased to announce that Phil Shane, Professor of Accounting at the University of Colorado at Boulder and the University of Auckland, has accepted the FASB 2010-2011 Research Fellowship, which will begin in August. Phil will be replacing Jeffrey Hales, who will complete his term and return to his [...] Read more > >

Over the course of the past few months, I’ve reviewed a number of books and papers that were nominated for the 2010 AAA Wildman Medal Award, which seeks to recognize papers that use rigorous research methods to deal with current issues in accounting practice. One of the nominated papers was entitled, “Consequences of GAAP disclosure [...] Read more > >

Blue Ribbon Panel to Weigh Launching Standard Setter for U.S. Private Companies NEW YORK—Members of a blue ribbon panel formed to address private company financial reporting in the Unites States said April 12 the group would decide whether to set up a new and separate standard-setting body that would address and write accounting standards for the private [...] Read more > >

I just got my Credit Suisse report entitled OFF AGAIN, ON AGAIN? re 166 and 167. I don’t know how many of you tried to teach this last year or now, but this is one difficult to get one’s arms around standard. It is not so concept-based. The underlying transactions are a little [...] Read more > >

Do you use SAS or STATA? Why? I use SAS, and am (a) an experimentalist, and (b) old. Are those the relevant variables? Are there substantive differences in which is best for certain tasks, or is it just a matter of familiarity? Do they play well together? Does anyone use them [...] Read more > >

Next Monday (April 12) is the first meeting of the Blue Ribbon Panel on Standard Setting for Private Companies.  This has the potential to be a very wide-ranging and interesting continuation of a very long-standing discussion about GAAP for non-public entities. As I understand it, many years ago, the debate began and was labeled the “big [...] Read more > >

Thanks to everyone who participated in yesterday’s Round Table event. We look forward to your follow-up discussions and hope this proves useful for future research. Here’s the video of the event if you’d like to refer back to it. You can read more about the event here. Read more > >

The PCAOB posted a job opening for the director of their new Financial Reporting Fraud Resource Center. From the press release: The Center is intended to complement the work of the PCAOB in improving audit quality in this area, by identifying opportunities and incentives for fraudulent financial reporting,” said Daniel L. Goelzer, PCAOB [...] Read more > >

Back in December 2009, FASB Chairman Bob Herz called for ‘decoupling’ GAAP and Banking regulations. Doing so could enhance the ability of both the FASB and the regulators to fulfill our critical mandates. We can continue to work with independence and an unwavering dedication to market transparency; at the same time the bank regulators can utilize [...] Read more > >

I think everyone would agree there are many reasons to enter a lease. However, I think we would all also agree that if the only reason to enter a lease was to obtain a certain accounting treatment then the accounting should be changed. Bill Bosco raised some very interest points related to the leasing industry [...] Read more > >

Thanks to everyone who participated in yesterday’s Round Table event. We had a great discussion about leasing. You can watch the video above. To skip the splash screen, scroll forward to 13:25. There is a brief problem with the sound until minute 14, but things are fine after that. I think a big take-away from the [...] Read more > >

On Tuesday, May 4th, 4 pm ET, we will be joined by Tom Selling of The Accounting Onion. Tom will be discussing his opinions of standard setting in general, including fundamental questions regarding recognition, measurement and disclosure. In the process, he will also be providing his thoughts on selected portions of the current FASB/IASB [...] Read more > >

On Wednesday, April 14th, 11 am ET, we will be joined by Eddie Riedl (Harvard University). Eddie will discuss on-going research relating to fair value accounting. This will include a paper co-authored with George Serafeim (also of Harvard University), entitled “Information Risk and Fair Values: An Examination of Equity Betas.” He will both [...] Read more > >

If you assumed that accounting standards wouldn't get sucked into the highly charged health care debate, you guessed wrong! From the New York Times An association representing 300 large corporations urged President Obama and Congress on Monday to repeal a provision of the health care overhaul that prompted AT&T, Caterpillar and other companies to announce substantial [...] Read more > >