Financial Accounting Standards Research Initiative

On July 20, the FASB issued a new exposure draft of their proposed ASU concerning disclosures of litigation-related loss contingencies.  For anyone who may not have been following this issue over the past 2 years or so, the FASB first issued an exposure draft on June 5, 2008 which proposed enhanced disclosure regarding contingent losses stemming [...] Read more > >

The Public Company Accounting Oversight Board (PCAOB) is looking for a PhD student who would like to intern with the Office of Research and Analysis (ORA) in the PCAOB’s Washington DC headquarters. This role will provide support to the quantitative economics group in ORA by assisting in studies and analyses conducted by the group.  This may [...] 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 > >

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 > >

On Tuesday, January 12th we had a Round Table Event with Jim Leisenring from the IASB. To view the archived video and a brief summary of the event, click here. Additional information about Jim and this Round Table Event can be found here. Follow-up comments from this event can be found here. Read more > >

To what extent do lenders or credit analysts care about lease renewal options? In the proposed lease accounting model, lessees will capitalize the longest lease term that is more likely than not to occur. This means that renewal periods that a lessee is not obligated to renew will be measured as part of the lease [...] Read more > >

I spent a good part of the weekend reading PhD files.  It seems like a fairly strong year, perhaps because the economy has closed out other opportunities.  (Many applicants hail from Wall Street).  I’d love to hear your impressions of any application pools you have seen.  But if you are one of the students who [...] Read more > >

On Saturday January 23, I will be moderating a panel discussion entitled, “Practice-Relevant Researchable Accounting Issues: Practitioners’ Views.”  The panelists are John Hepp, Partner with Grant Thornton, Bob Laux, Senior Director of Financial Accounting and Reporting at Microsoft Corporation, and Scott Taub, managing director of Financial Reporting Advisors and former Deputy Chief Accountant of the [...] Read more > >

Jim Leisenring’s remarks at yesterday’s roundtable were great.  In the portion related to the interaction of research and standard setting, he reminded us of two papers in Accounting Horizons on the interaction: “Academic accounting research and the standard setting process” by Katherine Schipper and “Accounting research: On the relevance of research to practice” by Jim [...] Read more > >

* UPDATE: The archived video is shown above. Please note that the welcome screen is displayed for the first 11 minutes and 10 seconds. You’ll want to skip to 11:10 in the video to begin seeing the discussion. We just finished a great Roundtable with Jim Leisenring from the IASB. We will get the video online [...] Read more > >

I’ve often heard of academics heading off to do an academic fellowship. Several, upon return, have commented on how the fellowship helped them connect with urgent issues, charge their batteries, and get ideas and resources for research. Fellowship opportunities are diverse in their functions and duration. Firms, standard setters, enforcement agencies, etc. are often interested in [...] Read more > >

On Tuesday, Dec 15th, 4 pm ET, we will be joined by Paul Zarowin. Paul Zarowin is a professor at New York University and an Editor at The Accounting Review. The topic of this session is earnings management, and Paul is going to provide us with a high level review of this literature and the [...] Read more > >

How often do we get to use big esoteric words from philosophy when we are talking about accounting standards?  Not often enough! Usually, the only philosophical terms we use are ‘normative’ and ‘positive,’ and I think many of us are pretty comfortable with the notion that standard setters are trying to answer normative questions (what should [...] Read more > >

You are probably aware that someone has (apparently illegally) published email correspondence involving climate scientists at the University of East Anglia.  This prompts me to think of writing two posts.  Later on, if I get the courage, I will write a post about how we deal with messy data — the emails discussing the matter [...] Read more > >

On Tuesday, Nov 17th, 4 pm ET, we will be joined by Susan Krische (University of Illinois at Urbana-Champaign).  Susan recently returned from an academic fellowship with the Office of the Chief Accountant at the Securities and Exchange Commission.  In light of her experience at the SEC, Susan will be leading a discussion on how [...] Read more > >

I was asked to write two chapters for a Wiley book called Behavioral Finance, and for some reason I said yes.  Neither chapter is a typical review paper.  Behavioral vs. Traditional Finance will be Chapter 2 of the book, and sets the stage by viewing the conflict between the subfields in light of the philosophy [...] Read more > >

It is the rare academic article that explicitly considers the objective function of the regulator.  William Bratton is a law professor from Georgetown who takes exactly this focus, and will joins us at the FASRI Roundtable on Wednesday, October 14th at 11am ET to lead us through the thicket of political pressures and machinations that [...] Read more > >

I’ve heard some people express the opinion that the FASB’s recent emphasis on an asset-liability approach is just a thinly veiled attempt to move financial reporting more in the direction of fair values. Ignoring the fact that the primacy of assets and liabilities is as old as the conceptual framework itself, I think recent evidence [...] Read more > >

Once upon a time, almost all accounting research used armchair reasoning to support claims about what Generally Accepted Accounting Principles should look like.  But in 1968, Ball and Brown published a paper that started a trend toward systematic collection of evidence on how financial information is used.  I always thought that the ultimate goal  was [...] Read more > >

The JAE Conference closed with a contentious discussion of Kothari, Ramanna and Skinner’s paper “What Should GAAP Look Like?”  I have a lot to say about the substance of this and other papers, but that will have to wait for later posts.  (I will probably be posting about the conference for much of the coming [...] Read more > >

Reading Kothari, Ramanna and Skinner’s answer to the question “What Should GAAP Look Like?” makes me want to get a better handle on the different perspectives academics are bringing to their criticism of accounting standards and the standard-setting process.  This will probably be the first of several posts, and I want to start with the [...] Read more > >

"Libby Boxes" Revenue recognition is one of FASRI’s key target areas for research over the coming year.   We are going to take a big step forward on Tuesday, October 6th, 4pm by laying out some possible approaches to research studies on RevRec.  We will be structuring our discussion around the key independent variables that researchers might [...] Read more > >

  I thought we had a great discussion last Wednesday  regarding the link between revenues and expenses.  For those who could not attend, you can listen to the archive session.   One of the key results in the Donelson, Jennings, and McInnis paper is that the special items component of earnings has increased recently, and this component [...] Read more > >

Yesterday (September 10, 2009), Rob Bloomfield posted regarding a legal perspective on FASB Accounting Standards Codification Topic 450 (FAS 5 – Accounting for Contingencies) and proposed changes in the disclosure rules for litigation-related contingencies.  This post relates to both the FAS 5 issue as well as an earlier discussion regarding conducting research with the FASB. While serving [...] Read more > >

Economist-bashing has been a popular sport lately, with current criticism coming from the left.  Paul Krugman weighed in with a long piece in the New York Times, and now the Huffington Post has an article claiming that the Federal Reserve has quashed research critical of its policies by spreading around lots of money and prestige.  [...] Read more > >

If you read our ABOUT page at the top menu of the FASRI website, you will see that FASRI doesn’t just lead discussions about accounting research (as fascinating as that may be).  We also actively support researchers who are willing to work with FASB staff to conduct original research studies.  At next week’s Round Table [...] Read more > >

The comment letter deadline for the IASB/FASB discussion paper on revenue recognition was June 19, 2009. The staff recently presented a high-level summary of the 200+ comment letters received by the boards. Given my recent posts (July 30 and Aug. 11) on the AAA FASC’s comment letter, I thought it might be useful to consider [...] Read more > >

We had a record audience for today’s talk with Steve Kachelmeier:  almost 50 people on the web and 30 people in Second Life.  And no one had to get stuck in an airport.  If you missed it, just go to our LIVE page and follow the instructions to see his talk ‘on demand’. In other news, [...] Read more > >

The Author As indicated below, Steve Kachelmeier, Senior Editor of The Accounting Review, will be joining us for a Round Table discussion on Wednesday, August 19th at 11am ET. For preparation, I would strongly recommend that you take a look at this fascinating (and very easy-reading) essay by former editor of the American Economic Review, Preston McAffee, [...] Read more > >

So far, no one has responded to my questions about the importance of contracts for revenue recognition. So, let me venture to ask a few more questions that occurred to me while reading the FASC’s comment letter on the revenue recognition discussion paper. In their response to Q9, the authors state: The traditional “income statement” approach suggests [...] Read more > >