Insights from Academic Participation in the FAF's Initial PIR: The PIR of FIN 48

2014 ◽  
Vol 28 (3) ◽  
pp. 479-500 ◽  
Author(s):  
Jennifer L. Blouin ◽  
Leslie A. Robinson
Keyword(s):  
Accounting Standards ◽  
Academic Community ◽  
Income Taxes ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Governmental Accounting ◽  
Fin 48 ◽  
Setting Process ◽  
Governmental Accounting Standards Board

SYNOPSIS In 2009, the Financial Accounting Foundation (FAF) determined that the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) standard setting process required a formal review to monitor and address issues that can arise after the implementation of accounting standards. The FAF selected FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, as the initial post-implementation review (PIR) standard. This paper informs the academic community about the PIR process and provides an academic perspective on the initial PIR of FIN 48. In particular, we demonstrate the role of the academic literature using the FIN 48 literature review prepared as part of the PIR process.

Selecting Railway Investments in 1890s America

2017 ◽  
Vol 44 (1) ◽  
pp. 77-93
Author(s):  
Joel E. Thompson
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Investment Strategies ◽  
Financial Accounting Standards Board ◽  
Accounting Data ◽  
Rational Decisions

ABSTRACT The purpose of financial reporting is to provide information to investors and creditors to help them make rational decisions (Financial Accounting Standards Board [FASB] 2010). Tracing the development of investors' methods should help with understanding the role of financial accounting. This study examines investment practices involving railways in 1890s America. As such, it furthers our knowledge about the development of investment methods and their necessary information. Moreover, it shows that as investment methods grew in sophistication, there was an enhanced demand for greater comparability in accounting data to make meaningful analyses. Competing investment strategies, largely devoid of accounting information, are also discussed.

Accounting for leases – lessons from COVID-19

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alan Teixeira
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Financial Accounting Standards Board ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Setting Process

Purpose The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) have given relief to lessees in response to the coronavirus (COVID-19) pandemic. However, it is not clear why any relief from the requirements in International Financial Reporting Standards (IFRS) or the Accounting Standards Codification (ASC) should be necessary. The purpose of this paper is to highlight weaknesses in how the IASB and FASB developed their leases Standards, and why those Standards are not robust enough to cope with a shock to the economic system. Design/methodology/approach The COVID-19 relief suspends some features of the leasing requirements rather than changing them. What if other economic or regulatory events cause the same circumstances to arise? Findings Have COVID-19 exposed weaknesses in the leasing standards that should have been avoided when they were developed or is COVID-19 the problem? Originality/value Analysis of actual board discussions and staff papers is unusual and provides insights into the standard-setting process.

An Examination of Voting Behavior of the ASB

1994 ◽  
Vol 9 (1) ◽  
pp. 117-141 ◽  
Author(s):  
John E. McEnroe
Keyword(s):  
Voting Behavior ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Board Members ◽  
Financial Accounting Standards Board ◽  
Accounting Firms ◽  
Setting Process ◽  
Auditing Standards ◽  
Audit Standard ◽  
Parent Organizations

The system by which auditing standards are promulgated has resided in the private sector since 1939. The members of the Auditing Standards Boards (ASB), unlike the Financial Accounting Standards Board (FASB), retain formal affiliations with their parent organizations during their tenure on the ASB. As a result, this process has been criticized by the late Senator Metcalf and others. One of Metcalf s allegations was that large accounting firms dominate the audit standard-setting process through their employees that serve on the ASB. Accordingly, this study examines certain voting behavior of the ASB in an effort to determine if the board members are acting as agents of their parent organizations or, rather, as independent rule makers. The results do support the proposition that in casting certain votes, the board members are acting in an agency capacity.

The FASB's Dissenting Opinions

2015 ◽  
Vol 29 (2) ◽  
pp. 363-375 ◽  
Author(s):  
Michael E. Bradbury ◽  
Julie A. Harrison
Keyword(s):  
Content Analysis ◽  
Conceptual Framework ◽  
Due Process ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Research And Practice ◽  
Before And After ◽  
Over Time

SYNOPSIS This paper provides a commentary on the results of a content analysis of dissenting opinions in Financial Accounting Standards Board (FASB) standards. During 1973 to 2009 the FASB issued 171 financial accounting standards. Half of these standards contained dissenting opinions. We identify and classify dissenting opinions based on whether the arguments are conceptual (conceptual framework-related or non-framework-related) or non-conceptual (e.g., scope, due process). We examine whether the types and frequencies of arguments change over time in response to the development of the FASB's conceptual framework and provide a commentary on the role of these opinions and the usefulness of analyzing them for research and practice. Our main finding from our analysis is that conceptual arguments are the most frequently used in the dissenting opinions, both before and after the introduction of the conceptual framework. However, of note is that many of the arguments raised, while conceptual in nature, are not from the conceptual framework. We suggest this indicates either a need for the conceptual framework language to be more widely used by the authors of dissenting opinions and/or the emergence of new conceptual arguments that may be relevant for future revisions of the conceptual framework.

The FASB’s Approach Toward Reviewing, Conducting and Sponsoring A cademic Research and to Engaging Academics

2021 ◽  
Author(s):  
Stephen A. Zeff
Keyword(s):  
Academic Research ◽  
Accounting Standards ◽  
Standard Setting ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Historical Account ◽  
Setting Process

This is a historical account of the various approaches which the Financial Accounting Standards Board has used since 1973 in making use of academic research and in bringing academics into the standard-setting process.

scholarly journals Expanding The Accounting Education Horizon: Sensitizing Students To The Professions Societal Obligations

2011 ◽  
Vol 4 (1) ◽  
Author(s):  
Brian W. Carpenter ◽  
Daniel P. Mahoney
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Accounting Education ◽  
Financial Accounting ◽  
Accounting Students ◽  
Financial Accounting Standards Board ◽  
Teaching Pedagogy ◽  
Alternative Teaching ◽  
Setting Process ◽  
Topical Area

This paper presents an alternative teaching pedagogy that goes beyond the learning of complex rules to provide accounting students with a better appreciation for their profession’s societal obligations.  The proposed pedagogy presents students with the evolution of accounting standards in a given topical area, and challenges them to evaluate the extent to which the different stages of evolution succeeded in meeting the profession’s obligations to society.  These obligations are defined in terms of the financial reporting objectives set forth in the Concepts Statements of the Financial Accounting Standards Board.  The proposed pedagogy is offered as a means of addressing problems with respect to the more conventional “memorize these rules” method of accounting instruction.  Our aim is to develop students who take a greater interest in the standard setting process and in fulfilling its promise of meeting the financial reporting needs of society.

Effects of Comprehensive-Income Characteristics on Nonprofessional Investors' Judgments: The Role of Financial-Statement Presentation Format

2000 ◽  
Vol 75 (2) ◽  
pp. 179-207 ◽  
Author(s):  
Laureen A. Maines ◽  
Linda S. McDaniel
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Statement ◽  
Presentation Format ◽  
Financial Accounting Standards Board ◽  
Management Performance ◽  
Nonprofessional Investors ◽  
Comprehensive Income ◽  
Presentation Formats

Statement of Financial Accounting Standards (SFAS) No. 130 requires companies to report comprehensive income in a primary financial statement, but allows its presentation in either a statement of comprehensive income or a statement of stockholders' equity (Financial Accounting Standards Board [FASB] 1997). In an experiment, we examine whether and how alternative presentation formats affect nonprofessional investors' processing of comprehensive-income information, specifically, information disclosing the volatility of unrealized gains on available-for-sale marketable securities. The results show that nonprofessional investors' judgments of corporate and management performance reflect the volatility of comprehensive income only when it is presented in a statement of comprehensive income. We provide evidence consistent with our psychology-based framework that these findings occur because format affects how nonprofessional investors weight comprehensive-income information and not whether they acquire this information or how they evaluate it.

Assessing the Readability of Government Accounting Standards: The Cloze Procedure

1993 ◽  
Vol 23 (3) ◽  
pp. 259-267 ◽  
Author(s):  
Raymond J. Shaffer ◽  
Kevin T. Stevens ◽  
William P. Stevens
Keyword(s):  
Accounting Standards ◽  
State Governments ◽  
College Level ◽  
Business Writing ◽  
Governmental Accounting ◽  
Government Accounting ◽  
Accounting Principles ◽  
Cloze Procedure ◽  
Governmental Accounting Standards Board

Studies assessing the readability of business writing typically use either readability formulas or, less often, the cloze procedure. This study argues that the cloze procedure, rather than a formula, is the appropriate method of assessing the readability of business writing and uses the cloze procedure to determine the readability of a statement issued by the Governmental Accounting Standards Board (GASB). The GASB provides authoritative statements on the accounting required for local and state governments and agencies. The results indicate that one important GASB statement is unreadable by college-level readers. If this and other GASB statements are unreadable by the users of GASB pronouncements, the GASB may not be fulfilling its role of communicating governmental accounting principles.

The American Accounting Association’s Financial Reporting Policy Committee’s Response to the Preliminary Views on Financial Statement Presentation

2010 ◽  
Vol 24 (2) ◽  
pp. 279-296 ◽  
Author(s):  
Mark Bradshaw ◽  
Carolyn Callahan ◽  
Jack Ciesielski ◽  
Elizabeth Gordon ◽  
Mark Kohlbeck ◽  
...  
Keyword(s):  
Financial Reporting ◽  
Academic Research ◽  
Accounting Standards ◽  
Income Taxes ◽  
Financial Accounting ◽  
Financial Statement ◽  
Management Approach ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board ◽  
Discussion Paper

SYNOPSIS: The Financial Accounting Standards Board and the International Accounting Standards Board (hereafter, the Boards) issued the discussion paper Preliminary Views on Financial Statement Presentation in late 2008. The Boards propose to significantly reconfigure the presentation of financial statements to offer parallel statements with standardized partitions of each financial statement into five categories: business activities, financing activities, income taxes, discontinued operations, and equity. The allocation of transactions within these partitions will depend crucially on management’s assessment of each transaction (i.e., the management approach). In this paper we comment on the proposal, with particular emphasis on empirical evidence and relevant theories from academic research. We highlight benefits of the proposed changes as well as some possible concerns. We conclude that the objective of providing a cohesive picture of activities through a uniform standardization of each financial statement by activity is desirable, but the proposed criteria for how activities are categorized results in potentially aberrant or confusing outcomes. Thus, any dissatisfaction with the current financial statement format may be replaced with other criticisms. Finally, the current proposal relies on the effectiveness of the management approach, which can only be successful if managers embrace the proposed structure.

Inconsistencies in U.S. GAAP: Accounting for Executory Contracts

2006 ◽  
Vol 21 (3) ◽  
pp. 291-295 ◽  
Author(s):  
Timothy B. Forsyth ◽  
Michael T. Dugan
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Legal Form ◽  
Generally Accepted Accounting Principles ◽  
Case Research ◽  
Accounting Principles ◽  
Setting Process ◽  
Cpa Exam

This instructional case provides four different scenarios that illustrate the inconsistent treatment of various executory contracts under current generally accepted accounting principles (GAAP). The purpose of the case is threefold. First, it provides students an opportunity to use the Financial Accounting Research System (FARS) to resolve several accounting issues related to long-term executory contracts. Familiarity with FARS is essential, both for “real-world” use when students enter the accounting profession and for success on the computerized CPA exam, which includes case research. Second, as the Financial Accounting Standards Board (FASB) attempts to move toward principles-based standards (as opposed to rules-based standards), the case provides students an opportunity to observe that GAAP seems to be rules-based and theoretically inconsistent in the case of executory contracts. Third, the case can be used as a premise for discussing the standard-setting process and exploring differences between the economic substance of a transaction and its legal form.

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