Inspired by my recent thirty-year high school reunion (Go Spartans!), I began to think about the changes that have occurred over the last thirty years in accounting and financial reporting. Not only has standard setting changed dramatically (we were at Statement of Financial Accounting Standards No. 44, Accounting for Intangible Assets of Motor Carriers, in […]
Colleen Cunningham
Posted inAccounting & Auditing
Accounting Framework: Get It Together
Six years ago the Financial Accounting Standards Board and the International Accounting Standards Board agreed to work on a joint project to develop an improved, common conceptual framework that would provide more consistent accounting rules. In September, the boards completed just the first phase of their collaborative effort. Slow going, indeed. As a member of […]
Posted inAccounting & Auditing
A Look at FASB’s Latest Foray Into Contingencies
Earlier this July, the Financial Accounting Standards Board published an exposure draft for comment, Contingencies (Topic 450): Disclosures of Certain Loss Contingencies. (Most of us know this as Financial Accounting Standard No. 5.) This is the board’s second attempt at addressing contingencies; its previous attempt in 2008 received 241 comment letters—mostly unsupportive. The board added […]
Posted inAccounting & Auditing
Reorganizing? Take Advantage of Fresh Start Accounting
As a result of the persistent poor economy, more companies are filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code. So-called “fresh start” accounting is available for many of them. New accounting pronouncements, however—principally new rules for business combinations and fair-value measurements—have made the application of fresh-start accounting even more complicated than ever. […]
Posted inAccounting & Auditing
Weighing the Worth of an External Audit
So much has been written lately about accounting scandals, audit failures, and the financial crisis. Reforms have been passed, yet accounting problems persist. This prompted me to ask: What’s the value of an external audit at all these days? In the beginning, the purpose of an external audit was to validate the accounts of management […]
Posted inTechnology
What Companies Should Know About XBRL Tagging
The digital revolution in financial reporting is underway! Oh, um—you haven’t noticed yet? The revolution began in earnest one year ago, when the Securities and Exchange Commission enacted a phased-in requirement that all registrants start filing financial statements using XBRL, a computer language to let software pluck out individual pieces of financial data and display […]
Posted inAccounting & Auditing
Conflict Exists Over How to Calculate Cash Flow
Every year I attend Financial Executives International’s annual Current Financial Reporting conference. The 2009 conference, held in November, was its usual excellent event, addressing everything from new accounting rules for mergers to new guidance on fair value to the future of financial statement presentation. And one specific point about the future of financial statements ended […]
Posted inAccounting & Auditing
FASB, IASB Plod Toward Convergence on Revenue
For an economy that isn’t seeing enough revenue these days, the United States certainly does have a lot of ways companies can try to recognize it. Currently, U.S. Generally Accepted Accounting Principles and GAAPs’ related guidance have more than 180 rules for revenue recognition (including the ones that conflict with others). Contrast that with International […]
Posted inUncategorized
The Upside to IFRS for Small, Medium Entities
The International Accounting Standards Board finally issued its long-awaited, International Financial Reporting Standard for small and medium-sized entities (SMEs) in July. This is more important than you think. Essentially, IFRS for SMEs is a simplified microcosm of full IFRS aimed at meeting the needs of financial reporting for private companies through a cost-benefit approach. The […]
Posted inAccounting & Auditing
Regulators Need to Get Moving on IFRS
Despite an apparent drop in momentum recently, the United States and the world are on a clear path to move to one set of global accounting standards. In fact, the only common theme we’ve seen in comments about the Securities and Exchange Commission’s plan to adopt International Financial Reporting Standards is that everyone believes we […]