In January 2011, FASB and IASB issued a proposal regarding loan losses that suggested separating loans into a “good book” and a “bad book” based on whether each loan had an indication of a credit loss or not. The 2011 proposal would have required a reserve for all expected losses on the bad book and […]
Scott Taub
Posted inFrom the Archive
One for All or All for One? The Unit-of-Account Problem
One of the issues that adds greatly to the complexity of accounting is the concept known as “unit of account.” The question is whether to make accounting decisions item by item or to make those decisions based upon some grouping of items. We have come up with many different answers to the unit of account […]
Posted inAccounting & Auditing
Taking Measure of a Multitude of Measures
For as long as I can remember, accountants have complained about the complexity of accounting standards. Congress has complained about it. Investors have complained about it. Regulators of all types have complained about it. They have complained in the past, and no doubt they will complain again in the future. The “cost vs. fair value” […]
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The State of Accounting Standard Setting
Less than three years ago, the Financial Accounting Standards Board was planning to issue a huge number of new accounting standards. At the same time, U.S. accountants and policy makers were considering how we would continue the move toward International Financial Reporting Standards. There was great momentum toward getting a lot done. To say the […]
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How Congress Is Misusing the Reporting System
The closest thing The Securities and Exchange Commission has to an official motto is former Chairman William Douglas’s decree: “We are the investor’s advocate.” Anyone with financial knowledge can quickly identify the target audience of SEC filings to be investors, and would describe the goal of those filings as providing information to investors to help […]
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Are Reduced Disclosure Requirements a Possibility?
As the Financial Accounting Standards Board heads towards completion (hopefully) of its projects on revenue recognition, leases, and financial instruments, another project entitled “Disclosure Framework,” might have slipped under the radar. It’s understandable if not everyone is following this project—it is in its early stages, and it won’t affect the numbers in the core financial […]
Posted inAccounting & Auditing
Restatements: Let Me Count the Ways
Five years ago, in my first Compliance Week column, which was on restatements, I suggested that companies should always correct an error once it is found, and I’m happy to say that this has become common practice. At that time, I discussed the process of correcting an error as a choice between correcting it in […]
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How to Simplify Financial Reports: Be Reasonable
Accountants often complain about just how hard preparing financial statements in accordance with U.S. Generally Accepted Accounting Principles can be, along with getting clean audit and internal control opinions and surviving scrutiny by the Securities and Exchange Commission and the Public Company Accounting Oversight Board. I agree; all of those things are difficult. But they’re […]
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Preparing Your 2011 Financial Reports
When this column is published, many Compliance Week readers will be in the middle of working on their 2011 financial reports. With that in mind, instead of delving into a policy issue or discussing some new standard that might affect you down the road, I have 10 quick tips to consider as you draft your […]
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Reforming the Audit Firms … Again
It’s been roughly a decade since a spate of financial frauds, the bursting of the internet bubble, and other factors served as catalysts for the restructuring of the audit profession as we knew it. The reforms put in place by the Sarbanes-Oxley Act and by similar legal measures in other jurisdictions—along with more focus on […]