Financial Accounting Standards Research Initiative

A recent CFO.com article talks about some pros and cons of the proposed leasing standard (FYI, the article says the exposure draft should come out in June). Having recently finished a couple of financial accounting courses, I’m excited to be done away with the 90% rule, the 75% rule, and the other two rules I [...] Read more > >

Reactions to the recent Accounting Standards Update on financial instruments are rolling in.  Start with this one from Bloomberg/Businessweek: Banks including Bank of America Corp., based in Charlotte, North Carolina, and San Francisco-based Wells Fargo & Co. already report the fair value of their loans in the footnotes of their quarterly reports to regulators. Bank of America’s [...] Read more > >

The FASB has just issued a long-awaited, and much-debated, Exposure Draft of a Proposed Accounting Standards Update (ASU) that would dramatically change the accounting for financial instruments. As noted in a press release (full text available here): Among other changes, the proposed ASU would seek to bring more transparency into financial statements by incorporating both amortized cost [...] Read more > >

You probably noticed we haven’t had a round table for a little while. We will continue with this hiatus for at least a few more weeks, as I am traveling throughout much of June, and Jeffrey is making the transition back from Norwalk to civilian life. We’ll start up later in the summer, and plan [...] Read more > >

Certain transactions are inherently difficult to account for. Investments in illiquid financial instruments may be impossible to value without heavy reliance on unverifiable assumptions from management. Transactions that include explicit or implicit rights of return must be recorded as sales or as a bundle of options, neither of which is quite accurate. [...] Read more > >

In case you haven’t already seen it elsewhere, the FASB website and Bob Herz’s testimony last Friday before the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises both contain Bob Herz’s earlier (April 19) letter to Congressman Barney Frank that discusses accounting standards and the Lehman Bankruptcy report.  Not surprisingly, I found it [...] Read more > >

I was talking about a recent regulatory failure with my wife last night (yes, we talk about such things), and we agreed that the truth would surely come out eventually, as uncertainties resolved. That led me to utter the pithy remark “Time is the best auditor.” My wife asked “who said that,” and I realized [...] Read more > >

As I’ve been preparing to enter a PhD program, several professors have recommended that I find an “area of expertise” such as statistics, datasets, writing, experimental design, SAS, etc. Obviously there are a lot of factors that go into this decision, the first of which probably being what I enjoy most and the second being what [...] Read more > >

In a May 2010 Harvard Business Review article, Dana Carney (assistant professor at Columbia University) answers questions about her research that examines the relationship between a sense of power and the ability to deceive others. Although I highly recommend reading the actual paper (which is very well written, I might add), let me summarize the basics [...] Read more > >

Like many of you, I was in a state of despair due to the lack of a Round Table this week. As a way of coping, I went back and watched this archived Round Table video on revenue recognition research! Click here to see the original post. Read more > >

IN THE MONEY: FASB Readies Proposal On Fair Value For Loans By Michael Rapoport A DOW JONES NEWSWIRES COLUMN 996 words 17 May 2010 15:27 Dow Jones News Service DJ English (c) 2010 Dow Jones & Company, Inc. NEW YORK (Dow Jones)–The battle over whether to expand the use of controversial “fair-value” accounting is about to heat up. Rulemakers at the Financial Accounting Standards Board are [...] Read more > >

Signed up to attend the FASB/IASB update on Sunday at the AAA in San Francisco. For the last many years, probably 10, i have attended and it’s a HUGE benefit to me in my teaching and research. I get up to speed in a very efficient way, and i hear it straight from those [...] Read more > >

I was reading a report that said that certain bank’s tangible book values are supported by large deferred tax assets. It went on to say that banks avoided DTA writedowns at 2009 year-end based on incorporating several years of future profitability in their assessment. First question: how can this be the case [...] Read more > >

Mary Barth and Wayne Landsman recently posted a paper that discusses how the financial crisis happened and what role financial accounting had in it. I really enjoyed their discussion of fair value accounting. I think it is a very clear explanation of why people blame fair value accounting and why fair value accounting actually isn’t [...] Read more > >

Just this morning, a team of researchers went live with a website that ranks accounting programs’ research by topic and methodology. If you’ve ever wondered which accounting programs are the strongest in analytical methodology, based on published research in the past 6, 12, or 20 years by faculty currently in the program, this site can [...] Read more > >

During the FASRI Roundtable this week, Tom Selling sparked a discussion about the extent to which accounting standards are unnecessarily complex.  In response I posed the question whether it was possible to have simple accounting standards for underlying transactions that are complex.  As I continue to think about it, I think that this is a [...] 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 > >