tag:blogger.com,1999:blog-85850827094770657792024-03-14T00:18:18.135-07:00Accounting information- Financial marketing-Stock ExchangesEvery thing you need to know about accounting!!What is accounting information? Users Of Accounting Information System,learn accounting,study accounting,accounting information,what is accounting information?,information about accounting,management accounting,information on accounting,accounting method,accounting management,information accounting,information of accountingUnknownnoreply@blogger.comBlogger300125tag:blogger.com,1999:blog-8585082709477065779.post-36868267995823562492012-11-15T14:01:00.001-08:002012-11-15T14:01:18.870-08:00Accounting System Information part 1In business, computations play a major part. Calculators and thick
files for records were used to track down company's history and present
development. It's a basic and traditional practice. It consumes much
time, effort and materials to finish. Sometimes, we see our cashiers or
accountants were very busy with their calculators and filing lots of
files in their cabinets. They are also the one who always cram and
render overtime. There's now a business solution that will make their
job lighter and easier. It is called as the accounting information
system.<br />
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Accounting
information system is a system of records, usually computer based,
which combines accounting principles and concepts with the benefits of
an information system and which is used to analyze and record business
transactions for the purpose to prepare financial statements and provide
accounting data to its users. Some accounting information systems are
still manual, i.e. accounting records are made with a pen, paper and
manual entries into accounting books.<br />
There are three major types
of accounting information systems used by small business owners. These
include manual or paper-based systems, spreadsheet accounting systems,
and accounting software. Each of these systems is unique in the level of
information that it provides to users. There is no one choice that is
right for everyone however makes sure that the one you select is one
that will meet the needs of your company. The more complex your
reporting requirements become, the more robust your accounting systems
should be.<br />
These automated systems save firms time and money. By
integrating accounting practices with technology, firms are able to post
transactions to various ledgers with a single click. Information about
invoicing, returns, and inventory is simultaneously updated as sales
people access the database and input transactions. And this process
could take hours for a company that processes many orders a day.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-8585082709477065779.post-84157225622566487422012-11-11T12:52:00.001-08:002012-11-11T12:53:49.400-08:00Accounting source and information Accounting is a definite process of interlinked activities that begins with the identification of transactions and ends screen the preparation of financial statements. Every step ropes the agility of accounting generates information. Generation of information is not an end in itself. evident is a instrumentality to facilitate the dissemination of information among various groups of users. consonant information enables the parties those who are interested to bring earmark decisions. Therefore, dissemination of information is one of the essential calling of accounting. To substitute useful, the accounting information should ensure to:&bull; insure information owing to forming economic decisions;<br />
&bull; urge the users who rely on financial statements as their principal source of information;<br />
&bull; Provide information well-suited because grading further predicting the timing, symbol and uncertainty of potential cash-flows;<br />
&bull; insure information for judging management's endowment to utilise resources effectively in meeting goals; provide factual also interpretative information by disclosing underlying assumptions on matters subject to interpretation, evaluation, prediction, or constitution; and<br />
<br />
<img alt="" class="alignnone" data-mce-src="http://www.accountingdegree101.com/wp-content/uploads/2012/06/accounting_degree8.jpg" height="329" src="http://www.accountingdegree101.com/wp-content/uploads/2012/06/accounting_degree8.jpg" title="accounting" width="426" /><br />
Provide information on activities affecting the society.The role of an accountant in generating accounting information is to screen, observe and recognise transactions and events to act and process them, and thereby compile reports comprising accounting information that are communicated to the users. These are then interpreted, decoded also used by management and other user groups. It must exhibit ensured that the information provided is relevant, adequate and candid through decision-making. The apparently aberrant needs of internal and alien users of accounting information swallow resulted in the progress of sub-disciplines within the accounting discipline namely, financial accounting, cost accounting also management accounting. Financial accounting assists for keeping a systematic record of financial transactions the presentation and preparation of pecuniary reports in order to arrive at a measure of organizational success and financial soundness.It relates to the past period, serves the stewardship metier and is monetary in nature. It is primarily concerned with the vittles of monetary information to unitary stakeholders. Cost accounting assists in analyzing the income besides expenditure being ascertaining the payment of contrastive merchandise manufactured or services provided by the firm besides fixation of prices thereof. It also helps to control the costs and providing needed costing information to management because decision-making. Management accounting deals ensconce the provision of required accounting information to people within the gadgetry to enable them in planning, decision-making, and controlling business operations.Management accounting draws the well-suited information mainly from cost accounting besides cash accounting which helps the management in budgeting, assessing profitability, elegant pricing decisions, capital expenditure decisions and so on. Besides, it generates various information which relates to the future again is good for decision-making clout the organisation. commensurate information includes: cash flows, sales forecast, manpower needs, pull requirement, environmental illumination about effects on water, air, land, humdrum resources, flora, fauna, affable responsibilities, human health, etc. As a result, the scope of accounting has become so vast, that larger areas rejoice in human resource accounting, social accounting, worry accounting presuppose further gained prominence. Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-10976381850601391312011-11-23T09:28:00.000-08:002011-11-23T09:28:00.090-08:00A Guide To Accounting For Goods In Transit <P>Accounting for Goods in transit is the first step in the process of tracking the flow of inventory. Accounting for inventory is a mandatory function to any business entity whose purpose not only demonstrates the effects of inventory on profitability and cash but also the assessable tax liability due to government. Accounting in the context of shareholders is usually done monthly, quarterly or annually, and relevant documents are generated and kept to report inventory activities over the same period. <P>Accounting for inventory for purposes of tax assessment goes beyond the day of filing your returns, because the law compels you to keep your inventory records for future verification by the tax authorities. Tax regulations in most countries require at least one physical inventory count per year; thus, these records should be stored in the event of a tax audit. If continuous cycle counting is used instead of a single physical inventory count, then these records must also be stored. The time period over which the law mandates you to retain your accounting documents differs under various legislations, but ranges between 5 and 7 years. <P><B>This page discusses record keeping from a context of Accounting for Goods in Transit</B> <P>?Goods in Transit or GIT as it is commonly referred to is a Current asset ordinarily classified under the sub heading of Inventory items within the balance sheet. It represents commitments to pay or already paid for inventory which does not yet physically exist in the company stores. <P>From the simplistic side of record keeping, a company receiving inventory typically records it as soon as it arrives. This way both the inventory and liability accounts increase at the same time, thereby resulting in no net change in the statement of financial position and no impact on profit or loss. Consequently, this situation creates no particular need for recordkeeping. <P><B>Goods in Transit Accounting</B> <P>Accounting for goods in transit is necessitated by a requirement for companies to declare commitments to which liability is due. In other words the company declares its interest in shipped goods for which title was only transferred at some point in the shipment process. <P>Shipping documents, such as a bill of lading, should be stored that indicate the date of shipment from the facility, as well as a notification form from the shipping entity that describes the date on which title passed to the buyer. The bill of lading can be used to estimate the date on which title passes by adding a standard number of days to the ship date, based on the distance of the buyer from the shipper?s facility; thus it is a critical document for affirming the timing of any revenue transactions. <P>Upon receipt of the goods, a verification of the goods received as per the bill of lading is done in comparison with the purchase order. A goods received note (listing items received) is then raised and signed by stores and procurement clerks to confirm material quantities received. <P>From a perspective of accounting for goods in transit, the company has to register in its books the amounts owed to the supplier as soon as liability or risk to the goods passes to the buyer. The timing is usually spelt out in the suppliers terms of payment to be confirmed by the company at the point of placing the order. Terms usually range from date of shipment to date of delivery. <P><B>Taking stock of liability to the goods in transit and risks there of</B> <P>Taking title to goods in transit means that you have not only accepted to pay your supplier the agreed price of what you expect to receive subject to deductions for quality and other losses to be borne by them, but also possible losses arising in transit due to theft, fire and others to be borne by you. Hence in addition to the supplier?s cost, you need to pay for insurance as an upfront additional cost to the goods for un foreseen risks. Other incidental costs might include financing charges payable or charged by your banker in the event that you are paying through a bank loan. <P>The ledger entries required when accounting for goods in transit are as follows: <P>Dr: Goods in Transit A/c (create unique tracking code for each consignment) <P>Cr: 1. Supplier?s A/c, 2. Insurers A/c (premium payable), 3. Bank a/c (with interest charged) <P>Credit any or all of the three account options above depending on their relevance to the consignment. Also make reference to the consignment tracking code in your narration for the payments, you will need this information at a later stage when valuing your goods after they arrive at your company store. <P>Return from Accounting For Goods In Transit to Inventory Management. </P><BR><br /><p><a href="http://www.small-business-accounting-guide.com/accounting-for-goods-in-transit.html" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-8585082709477065779.post-26162217021560397782011-11-23T05:04:00.000-08:002011-11-23T05:04:00.253-08:00What's the latest on the SEC's decision on IFRS <body onload="updateOptions('All');"> <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC5\rgp_logo.jpg" alt="Resources Global Professionals" /> Consulting. From the inside out. <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC5\us-flag.gif" width="24" height="12" vspace="0" alt="" style="margin-top: 5px; margin-right: -4px; border: 1px white solid; background: #cc0000;"> <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC5\tier2_photo08.jpg" width="163" height="148" alt="" /> <b>Our Approach</b><br> <b>Finance & Accounting</b><br> <b>Human Capital</b><br> <b>Information Management</b><br> <b>Legal & Regulatory</b><br> <b>Risk & Compliance</b><br> <b>Supply Chain</b><br> <b>IFRS/Convergence</b><br> <b>policyIQ®</b><br> <b>Government Services</b><br> <b>Insights & Education</b><br> What's the latest on the SEC's decision on IFRS Resources Global Professionals Finance & Accounting Blog Thursday, October 20. 2011 What's the latest on the SEC's decision on IFRS The SEC is expected to make a decision this year as to when and how the US may move to International Financial Reporting Standards. With everything going on with the economy, and the SEC's preoccupation with everything Dodd-Frank and enforcement - the IFRS decision has not been a priority. <br /><br />The SEC staff did issue a discussion document asking for comments about a proposed way to move forward in May of this year. The so-called "condorsement" approach was first floated at the December 2010 AICPA SEC conference. Essentially, it is a hybrid of ongoing convergence of US GAAP and IFRS and an endorsement protocol. The proposed approach would retain US GAAP. This would solve many of the regulatory issues where US GAAP is referenced in state and federal codes (such as the tax code!). IFRS would be incorporated into US GAAP over a defined period of time. Perhaps 5 to 7 years. <br />FASB would incorporate newly issued or amended IFRSs into US GAAP pursuant to an established endorsement protocol.<br />The protocol would provide the commission and the FASB the ability to modify or supplement IFRS when in the publics’ interest. The approach would include a transitional period during which existing differences between IFRS and US GAAP would be eliminated through ongoing FASB standard setting efforts. The approach seems to have some legs - it would certainly be more cost effective and a smoother transition for companies. <br /><br />The AICPA and others have also asked that companies be able to outright adopt IFRS on a voluntary basis. This may make more economical sense for those companies that are reporting both ways due to statutory reporting requirements! Additionally, it would be hard for the SEC to say no to this, as they already allow foreign private issuers the ability to file using IFRS.<br /><br />More to come on the issue - we will keep you posted!<br /> Posted by Colleen Cunningham at 10:15 <br /> Trackbacks Trackback specific URI for this entry <br /> No Trackbacks <br /> Comments Display comments as (Linear | Threaded) <br /> No comments <br /> The author does not allow comments to this entry Subscribe To This Blog <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC5\feed-icon-14x14.png" alt="XML" style="border: 0px" /> RSS 2.0 feed Recent Entries What's the latest on the SEC's decision on IFRSWhat will happen with IFRS in the US in 2011?Dodd-Frank Bill signed into lawFASB issues proposal on Disclosures about Loss ContingenciesThe road to IFRS/US GAAP convergenceFASB issues proposals on Financial Instruments and Combining Income Statement with OCI statementIASB issues proposals on pension accounting and financial liabilitiesHealthcare Reform - Implications to BusinessesHealthcare Reform changes Financial Reporting in 1Q10 for Medicare Part D subsidySEC statement regarding IFRS roadmap Archives November 2011October 2011September 2011Recent...Older... Home | Office Locator | Contact Us | Employee Login | Terms of Use | Privacy Policy | Site Map <br> ©2011 Resources Global Professionals <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC5\rgp_redBarRight.gif" width="22" height="2" alt="" /> </body><br /><p><a href="http://www.resourcesglobal.com/blogs/fna/redirect.php?/archives/20-Whats-the-latest-on-the-SECs-decision-on-IFRS.html" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-8585082709477065779.post-34553138136998264982011-11-23T00:52:00.000-08:002011-11-23T00:52:00.895-08:00FAF Proposes a New Private Company Council <P>The Financial Accounting Foundation has issued for public comment a Plan to Establish the Private Company Standards Improvement Council</EM>. The plan “calls for the establishment of a new council with the authority to identify, propose and vote on specific improvements to US accounting standards for private companies.” As stated in this press release, the council, if established, would “identify, propose, deliberate and formally vote on specific exceptions or modifications to US Generally Accepted Accounting Principles (US GAAP) for private companies.”</P><P>Importantly, this council’s decisions (if approved by two-thirds vote) would still be subject to ratification by the FASB (similar to the current ratification process required for EITF decisions to become authoritative).</P><P>While the FAF views the avoidance of a two-GAAP system as being one of the primary benefits of this proposal, others are likely cite that outcome as being one of the biggest problems with the proposal. In particular, Barry Melancon, president and CEO of the AICPA, has been a strong advocate for the establishment of a private company standards board. A statement from Melancon and Paul Stahlin, AICPA Chair, can be found here.</P><P>The call for public comments is open through Jan 14, 2012.</P><br /><p><a href="http://fasri.net/index.php/2011/10/faf-proposes-a-new-private-company-council/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-8585082709477065779.post-46827141817411421542011-11-22T20:18:00.000-08:002011-11-22T20:18:00.623-08:00The Pros and Cons of Investing in Gold <P>Precious metals have always been an investment worth looking at given their high return and alternative choice to conventional stocks. When it comes to gold there are many pros and cons that should be considered. During a bear market, gold is often a home run as it basically stands on its own, rarely affected by market fluctuations or tethered to common industrial markets. However, volatility can be cause for concern as trading is affected by a barrage of global calamities that can easily alter the gold index. Before dumping all you have into this age old metal, consider both sides of the golden coin.</P><P>Pro – Gold holds its value longer and stronger than many other investments. Since 2001, gold has risen one hundred and fifty percent.</P><P>Con – If you invest in physical gold directly you will need to rent a secure location such as a safety deposit box or storage facility.</P><P>Pro – Owning physical gold more often than not will guarantee secure wealth in an economic disaster.</P><P>Con – Allocated gold (specific, numbered bars allocated to you) charge an annual storage and insurance fee that adds up over time.</P><P>Pro – Gold will never lose its value.</P><P>Con – If you are looking for a fast turnaround gold is not a candidate. It is a buy/hold investment.</P><P>Pro – Gold does not degenerate over time making it a stable metal which maintains its value. It will never tarnish, corrode or rust.</P><P>Con – Gold is not an investment but rather a hedge on wealth.</P><P>Pro – This metal is traded on emotion known as the fear and love trade by Frank Holmes, CEO/CIO at U.S. Global Investors (a San Antonio investment fund). These two emotions cover both ends of the trading playing field.</P><P>Con – If interest rates rise two or more percent higher than inflation, gold has been known to drop in value.</P><P>Pro – The WGC (World Gold Council) reports that gold is not a credit risk, it has no attached liability.</P><P>Con – Traditional brokers should not be used when investing in gold.</P><P>Pro – According to portfolio manager Mark Johnson of the USAA Precious Metals & Mineral Fund, on investing in gold mining, “…you probably have to put two times as much money into bullion or ETFs (exchange-traded product) to get the same exposure to gold as you do with mining shares.”</P><P>Con – Unallocated accounts (you are assigned gold but do not obtain tangible possession) are often all under one company’s name. This means that if that company missteps, your gold can be confiscated.</P><P>Pro – Cloud gold is owning gold certificates digitally (although you actually receive a physical certificate) which can be more cost effective, especially for day traders.</P><P>Con – The taxes can sometimes double conventional stock trades on account of gold being considered a collectable by the government.</P><P>Investing in gold is a risk that carries with it great rewards, if done properly. Start small and work with what is right for you to get the most out of this potentially successful asset.</P><P>About the Author: Matt Tomasino is a full-time professional writer who enjoys following the stock market and studying investments. He has a particular interest in energy and minerals and can regularly be found checking the news at Eagle Ford Shale Texas and other major sites.</P><P>Related posts:</P>BusinessWeek Investing InsightsInvesting BasicInvestorLoft Real Estate Investing BlogIncorporate Global Macro Analysis Into Intraday TradingCurious Cat Investing and Economics Blog<br /><p><a href="http://feedproxy.google.com/~r/FinancialBloggers/~3/5I2rdZHc-Ro/the-pros-and-cons-of-investing-in-gold-584.html" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-9396440988529957162011-11-22T16:22:00.000-08:002011-11-22T16:22:00.288-08:00Bank vs. Credit Union – Pros and Cons <P>If you want to open an account or secure a loan, you will have to decide between going with a bank or a credit union. Many people don’t even think about the choice, they just go with what they’re used to or what they saw their parents using. It is, however, worth weighing the options before you choose your type of financial institution. It is important to know the fundamental differences between a bank and a credit union. Banks are large, private corporations, and you are simply a customer to them with no real power or say in the business. Credit unions are smaller, public nonprofits, and as a member you would be a partial owner of the establishment. Here is a quick guide to banks versus credit unions.</P><P><STRONG>More Services and Products</STRONG> <P>Because banks are so large and because they are operating for profit, they offer a much larger range of products and services to their customers. Almost any type of financial need you have, from a checking account to savings to loans to IRA’s and much more, you will be able to do all in one place with a bank. There are a lot more options to choose from when deciding on the right financial plan and benefits for your personal needs.</P><P><STRONG>More Accessibility</STRONG> <P>Banks also offer much more accessibility to your money. They may have ATM’s available for you, and even all over the country. It is much easier to gain access to your money when you’re on the go, especially when traveling. In addition, they can often afford to have a large staff available to help you at anytime, including customer service you can call 24/7. This is essential for people who need a bank that works well with their rigid or unusual schedule.</P><P><STRONG>Less Personalization</STRONG> <P>Since banks are corporations, customers often feel like they are “just another account number” and less like they are getting personalized assistance. If you aren’t concerned that your banker cares about you or knows your first name, then the general nature of the bank won’t bother you. But banks handle so many customers, it is hard for them to advocate for you as much as you’d like them to.</P><P><STRONG>Worse Rates</STRONG> <P>Banks offer higher interest rates for loans and lower interest rates for savings accounts than credit unions. This alone makes many people prefer a credit union to a bank.</P><P><STRONG>Better Rates</STRONG> <P>Credit unions offer more competitive and appealing interest rates. From lower rates on loans to higher rates on savings accounts, credit unions usually win in this category compared to banks.</P><P><STRONG>More Personalization</STRONG> <P>Because credit unions are often smaller and local to you, they will often help you feel more like a valued member. Credit unions often offer more quality customer service because the members are part-owners in the company. Pleasing you and meeting your needs is a high priority to most credit unions.</P><P><STRONG>Fewer Options</STRONG> <P>The smaller size of a credit union often means they cannot offer as many products and services for your financial needs. Because of this, you may need to have accounts in multiple places, and that means more work for you. Many credit unions are beginning to offer more checking options and other services, but banks still have more available to you in one place.</P><P><STRONG>Less Accessibility</STRONG> <P>Credit unions often do not offer their own ATM’s, and do not have the ability to staff 24-hour customer service lines. It can be harder to get your money at any time that you need it, such as in the case of an emergency. Less access to your money at any time is one downside to a credit union versus a bank.</P><P>Grammarly grammar checker is always striving to share interesting and useful information. This article was edited using the most powerful grammar tool on the web.</P><P>Related posts:</P>The Pros and Cons of Investing in Gold10 Easy Ways To Organize Your Business FinancesUFX Bank Online Forex Broker Service: OverviewGetting Finance after Bankruptcy Easier by Boosting Your Credit ScoreBank Vibe<br /><p><a href="http://feedproxy.google.com/~r/FinancialBloggers/~3/Jm8CJlxUQCI/bank-vs-credit-union-pros-and-cons-592.html" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-27054122227415346102011-11-22T12:43:00.000-08:002011-11-22T12:43:00.417-08:00Must read coming out soon <P>One of long-time favorite analysts, Mike Mayo, has written a book about analysts and Wall Street. He and his forthcoming book are written up in today’s Wall Street Journal.</P><P>A snippet from the article, to give you a sense of what the book is about.</P><P>Mr. Mayo is a controversial figure with a reputation as a bruiser with a passion for the limelight, and the title of the book underscores those traits. “Exile on Wall Street: One Analyst’s Fight to Save the Big Banks From Themselves” chronicles Mr. Mayo’s 20-plus years working for, and writing about, some of the world’s biggest financial firms.</P><P>Likely to be a good read. </P><br /><p><a href="http://fasri.net/index.php/2011/11/must-read-coming-out-soon/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-64356902285906406962011-11-22T09:20:00.000-08:002011-11-22T09:20:00.763-08:00Will the AICPA create a new regulatory board for private companies? <P>I feel compelled to reiterate the standard disclaimer that my post in no way represents the views of the FAF or the FASB. I have not consulted with the Board, staff, or FAF employees prior to this posting, and the opinions expressed are my own.</P><P>The AICPA’s response to the FAF’s proposal for the creation of a Private Company Standards Improvement Council (PCSIC) has been predictably unsupportive. The organization has made its preference for a separate private company standards-setting board widely known, and intends to organize another letter-writing campaign among its membership expressing this view. A similar campaign by the AICPA prior to the release of the FAF’s proposal resulted in hundreds of form letters being sent to the FAF. </P><P>A previous FASRI post (with comments) outlines some of the basic aspects of the PCSIC proposal. Basically, the PCSIC will act in a similar fashion to the EITF with a fundamental difference that the PCSIC will have authority to set its own agenda. The AICPA particularly objects to the veto power granted to the FASB on any decisions made by the PCSIC. In an Accounting Today article (here), AICPA representatives give several arguments in support of a separate board, but state they “do not want to control private company financial reporting” (quote from article). </P><P>However, just yesterday, the AICPA’s governing council approved a resolution that if the FAF does not create a separate private company standard setting body, the AICPA will consider other options, which explicitly includes the establishment of such a board by the AICPA. The entire resolution can be read here. Clearly, the AICPA is frustrated over this issue. But, I think the FAF is making the correct move, and I briefly explain why.</P><P>The AICPA’s primary objections to the FAF proposal can be summarized as follows,</P><P>1) US standard setting does not adequately address the needs of private companies, and</P><P>2) the FAF’s current proposal will almost certainly maintain the current inadequacies because</P>FASB has oversight of the PCSIC and veto power of any decisions,private company interests are not adequately represented on the FAF and FASB,the FASB moves too slowly on issues, and this perceived weakness is exacerbated for private companies because the FASB has higher priorities, especially with international convergence, andthe PCSIC is not fundamentally different from the Private Company Financial Reporting Committee (PCFRC).<P>The FAF has acknowledged the validity of point 1) above (at least, implicitly), and several steps have been taken to address it, including, the creation of the PCFRC, increasing private company representation on the FASB, and the establishment of the Blue Ribbon Panel. Ultimately, the FAF followed almost all of the Blue Ribbon Panel recommendations – except the significant recommendation of establishing a separate board. </P><P>With respect to point 2), the EITF provides a useful model for how the PCSIC is likely to function, and serves to contradict many of the objections of the AICPA. Similar to the FAF’s proposal for the PCSIC, the FASB monitors the progress of EITF projects and must ratify all EITF decisions prior to implementation into GAAP. In spite of this FASB veto power and oversight, the EITF has proven capable of establishing accounting guidance that is widely accepted. Furthermore, EITF action is relatively quick, even though public exposure of their decisions is required. </P><P>I don’t understand the AICPA’s argument that the FAF’s proposal will fail due to a lack of private company representation in the FAF and the FASB. Of course, the PCSIC will be comprised entirely of private company advocates. Just as the FASB closely listens to all their constituents through various outreach activities, I’m confident the FASB would similarly listen to the input of the committee. Moreover, a member of the FASB (likely with private company experience) will chair the PCSIC, which increases the probability that the FASB will be sympathetic to the committee’s views. </P><P>The AICPA has argued fervently that the FASB is too slow in its decisions. The standard setting process certainly takes time – sometimes excessive amounts of time, it would seem. However, our profession has learned through experience that it’s extremely important to both regulators and preparers to get things correct the first time. Preparers do not like having to keep changing their reporting systems, and regulators, obviously, do not like being criticized for getting things wrong. Thus, a slow and deliberate process with ample opportunity for public feedback is necessary. I don’t see how a separate board would somehow be able to get around the requirement of due process.</P><P>Finally, important aspects of the proposal that will facilitate its success are that the PCSIC can establish its own agenda, and the committee will be guided by a framework that establishes criteria for when deviations from GAAP can be justified for private companies. These aspects are important differences from the current PCFRC, and the AICPA does not appear to be giving adequate consideration to them. Overall, I think the FAF’s proposal balances the needs of private companies with the needs of financial statement users who want comparability. </P><P>Is the AICPA really serious about establishing their own board? Haven’t we already “been there, done that”? Will it really be independent? How will the board be financed? </P><P>FASRI has a Roundtable scheduled on November 1 to discuss issues surrounding private companies. Daryl Buck will be the discussion leader, a Board member with significant private company experience. Put it on your calendar if you are interested in these issues. More details will follow.</P><br /><p><a href="http://fasri.net/index.php/2011/10/will-the-aicpa-create-a-new-regulatory-board-fom-private-companies/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-50640207600423977962011-11-22T05:40:00.000-08:002011-11-22T05:40:00.555-08:00FASRI Roundtable: Doron Nissim, Columbia University <P>The FASRI Roundtable series continues at 4pm eastern time on Tuesday, October 11. Our guest speaker will be Doron Nissim, from Columbia University. Doron received his Ph.D. from UC Berkeley in 1998 and has since published extensively in top-tier journals, including manuscripts that are related to the valuation of financial instruments, which is the topic of this week’s Roundtable discussion. Hal Schroeder, a FASB Board Member, provided some interesting views last week on the current FASB/IASB deliberations on financial instruments. Doron will follow up on that discussion with some updated empirical evidence on loan-loss reserves and discuss implications of the proposed approach. The discussion should provide interesting perspectives, and generate new research ideas for the attendees. </P><P> Even if you were unable to attend Hal’s session last week, please plan to join us for the upcoming Roundtable with Doron. </P><P>Participation <STRONG>(PLEASE NOTE DIRECTIONS FOR PARTICIPATION HAVE CHANGED)</STRONG>:</P><P> To participate in the FASB Roundtable,</P><P>1) go to http://intercall.webex.com anytime after 2:00 pm (New York time) on Tuesday, October 7. </P><P>2) Type in the following meeting number: 596 198 403 and click “Join Now”.</P><P>3) On the next page, fill in your name, email address, and the password “Fasri001” (case sensitive). Then click “Join”. </P><P>4) After joining the meeting, you will be prompted for your telephone number. Insert your telephone number and click the “Call Me” button. Your phone will ring, which you can use to hear and speak. Please remember to put yourself on mute when you are not speaking (can be done by clicking the mic next to your name).</P><P> NOTE: We no longer have the option of using computer headphones. The FAF is working on gaining access to this option in the future.</P><P> If you receive an error message or need help at any time, contact me at 203-956-3472.</P><P>Lynn</P><br /><p><a href="http://fasri.net/index.php/2011/10/fasri-roundtable-doron-nissim-columbia-university/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-17538954098276595382011-11-22T00:47:00.000-08:002011-11-22T00:47:00.690-08:00DVA? where do these names come from … <P>JPMorgan-Chase just reported third quarter results including a significant item: A $1.9 billion pretax ($0.29 per share after-tax) benefit from debit valuation adjustment (“DVA”) gains in the Investment Bank, resulting from widening of the Firm’s credit spreads.</P><P>This is the ‘own credit risk’ problem. Gains from fair value accounting on your liabilities because your own discount rate has increased because your credit worthiness has deteriorated. (So the fair value of your liabilities decreases (debit the debt) and an unrealized holding gain is recognized (credit gain).) </P><P>Debit valuation adjustment?? Ay Ay Ay Yi.</P><br /><p><a href="http://fasri.net/index.php/2011/10/dva-where-do-these-names-come-from/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-88699903589686778232011-11-21T20:47:00.000-08:002011-11-21T20:47:00.855-08:00Empirical data SCF <P>See my previous post on the SCF for premiums and discounts.</P><P>As I prepared for class, i searched for examples and found a number that had done the treatment incorrectly. I saw a lot of the incorrect treatment on the asset side. I emailed Dan Gode who said the same issue applies to the asset side (i.e., no reason why treatment should be different there).</P><P>These won’t cut and paste very well, but let me try:<BR><STRONG><BR>HERE’s one where they do the liability side wrong…</STRONG><BR>MAGMA DESIGN AUTOMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)</P><P>Fiscal Year Ended<BR>May1, 2011 May 2, 2010 May 3, 2009<BR>Cash flows from operating activities:<BR>Net loss $ (3,262 ) $ (3,334 ) $ (129,242 )<BR>Adjustments to reconcile net loss to net cash provided by (used in) operating activities:<BR>Depreciation 4,538 6,278 8,633<BR>Amortization of intangible assets 4,166 4,978 28,270<BR>Provision for doubtful accounts (net of recovery) 143 (174 ) 1,124<BR>Amortization of debt discount and debt issuance costs 572 1,976 2,562<BR>Amortization of debt premium (310 ) (240 ) - </P><P><STRONG><BR>HERE are several where they do the asset side wrong…</STRONG><BR>MAGMA DESIGN AUTOMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)</P><P>Fiscal Year Ended<BR>May1, 2011 May 2, 2010 May 3, 2009<BR>Cash flows from operating activities:<BR>Net loss $ (3,262 ) $ (3,334 ) $ (129,242 )<BR>Adjustments to reconcile net loss to net cash provided by (used in) operating activities:<BR>Depreciation 4,538 6,278 8,633<BR>Amortization of intangible assets 4,166 4,978 28,270<BR>Provision for doubtful accounts (net of recovery) 143 (174 ) 1,124<BR>Amortization of debt discount and debt issuance costs 572 1,976 2,562<BR>Amortization of debt premium (310 ) (240 ) - </P><P>Greene County Bancorp, Inc. Consolidated Statements of Cash Flows (In thousands)</P><P>Years Ended June 30,<BR>2011 2010<BR>Cash flows from operating activities:<BR>Net Income $5,291 $4,885<BR>Adjustments to reconcile net income to net cash provided by operating activities:<BR>Depreciation 737 922<BR>Deferred income tax (benefit) expense (140) 719<BR>Net amortization of premiums and discounts 1,031 836<BR>Net amortization of deferred loan costs and fees 231 187<BR>Provision for loan losses 1,628 1,273</P><P>=====================================</P><P>PHARMACYCLICS, INC.<BR>Enhanced Coverage Linking</P><P>(a development stage enterprise) </P><P>CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)</P><P>Year Ended June 30, Period from Inception (April 19, 1991) through June 30,<BR>2011 2010 2009 2011<BR>Cash flows from operating activities:<BR>Net loss $ (35,203 ) $ (15,024 ) $ (23,447 ) $ (413,125 )<BR>Adjustments to reconcile net loss to net cash used in<BR>operating activities:<BR>Depreciation and amortization 292 235 299 15,811<BR>Amortization of premium/discount on marketable securities, net 874 421 (32 ) 1,269<BR>Amortization of debt discount - 21 549 570<BR>===============================</P><P>TIVO INC.<BR>Enhanced Coverage Linking</P><P>CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) </P><P>Fiscal Year ended January 31,<BR>2011 2010 2009<BR>CASH FLOWS FROM OPERATING ACTIVITIES<BR>Net income (loss) $ (84,512 ) $ (23,036 ) 104,111<BR>Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:<BR>Depreciation and amortization of property and equipment and intangibles 9,050 9,160 9,783<BR>Loss on disposal of fixed assets 42 - -<BR>Stock-based compensation expense 25,442 25,354 23,420<BR>Amortization of discounts and premiums on investments 1,768 - -<BR>=======================</P><P>OCEAN POWER TECHNOLOGIES, INC. AND SUBSIDIARIES<BR>Consolidated Statements of Cash Flows</P><P>Year Ended April 30,<BR>2011 2010 2009<BR>Cash flows from operating activities:<BR>Net loss $ (20,458,824 ) (19,132,008 ) (18,315,150 )<BR>Adjustments to reconcile net loss to net cash used in operating activities:<BR>Foreign exchange loss (gain) 229,415 (540,644 ) 1,295,227<BR>Depreciation and amortization 358,722 365,755 299,405<BR>Loss on disposal of equipment 5,293 113,087 268,976<BR>Treasury note premium amortization 71,236 146,834 288,331<BR>===============</P><br /><p><a href="http://fasri.net/index.php/2011/10/empirical-data-scf/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-74276875636442817862011-11-21T17:45:00.000-08:002011-11-21T17:45:00.839-08:00Social Media and Corporate Espionage October 28, 2011 by David Albrecht </P><P><IMG class="alignright size-medium wp-image-4752" title=groupdiscussions alt="" src="http://profalbrecht.files.wordpress.com/2011/09/groupdiscussions.jpg?w=260&h=231" width=260 height=231>I’m a social media guy–blogging, tweeting, connecting via LinkedIn, and updating through a Facebook page. Social media usage has helped transform me into a better listener and a kinder, gentler speaker. That’s enough proof for me to believe that social media makes a person more social (although reliable research findings collaborate this conclusion).</P><P>I’m not the only one hooked on social media. Hundreds of millions are active on Facebook, and someday the number might reach one billion. And why do so many people use various social media? It’s because human beings are social creatures. We tend to do things in families and groups. We like interacting.</P><P>There are benefits to being social, such as companionship, friendship, love, respect, and sharing information. There are costs, too. Some are unskilled at being social and alienate instead of befriend. And others reveal too much, too often</EM>. Although loose lips get kissed, they also sink ships.</P><P>Businesses are flocking to social media, and using it for marketing, communication, employee education and image branding. The primary reason is increased profit. However, a downside is starting to emerge.</P><P>Enter corporate espionage</EM>, a thriving industry. Have you seen the movie Duplicity</EM>? Clive Owen plays Ray Koval, formerly of MI6, and Julia Roberts plays Claire Stenwick, formerly of the CIA. They now work for corporate rivals who employ their own spy networks.</P><P>Far less interesting than Duplicity</EM> is Broker, Trader, Lawyer, Spy: The Secret World</EM>, by Eamon Javers. Javers’ book is a history of the corporate espionage business, which really does exist. From page one of BTLS:</P><BLOCKQUOTE readability="19"><P>There was no way for [KPMG accountant] Enright to know that Hamilton was not at all who he suggested he was. He couldn’t know that several clandestine operatives were right now following him from his office at KPMG Financial Advisory Services to the restaurant, working in an efficient tag-team relay to ensure that Enright wouldn’t spot anything unusual. And Enright certainly didn’t notice that, among the crowd of well-dressed international business people and tourists dining at Little Venice, one woman watched as he took his seat. She, too, was working for Hamilton, and she was there to make sure Enright didn’t have backup of his own.</P><P>Enright did not. He was way out of his league. The British-born was just like millions of mid-level white collar workers around the world. What did he know about espionage? But his position as a senior manager in corporate recovery gave him access to documents for which a wealthy client might pay millions of dollars. Might lie for. Might steal, if necessary. And that client hired the man who called himself Nick Hamilton. Hamilton’s team was a mix of American CIA veterans, former officers of the British MI5 security service, and young, adventure-seeking American college graduates.</P><P>They were corporate spies.</P></BLOCKQUOTE><P>Oh, to be young, athletic and good looking again. I might enjoy a spate of adventure.</P><P>Corporate espionage represents a serious threat to business, in general, and accounting/auditing firms in particular. Although economic espionage is illegal, it has spawned a thriving industry. Moreover, it is just a step removed from outsider fraud aimed at small to medium sized business. Linda Kotze, in “Corporate Espionage Highlighted in the Movie Duplicity,” describes the scope of the problem,</P><BLOCKQUOTE readability="10"><P>Research from consulting firm PricewaterhouseCoopers, estimates that Corporate Espionage costs the world’s 1,000 largest companies in excess of US$45 billion every year. Unfortunately, these surveys and estimates do not include the over 600,000 businesses in the US with more than 20 employees or the 98,000 companies with more than 100 employees.</P></BLOCKQUOTE><P>Daniel J. Benny, a private investigator and security consultant has placed his PowerPoint presentation, “Corporate Espionage Countermeasures,” on-line.</P><P>Corporate espionage and corporate fraud from outsiders are serious threats. Accounting/auditing firms are frequently targets of such espionage activities because of their access to inside corporate information. That so many businesses and employees are using social media just makes the job of spies that much easier.</P><P>Unpublished research reveals that both SMBEs and their accountants/auditors know next to nothing about combatting it. Perhaps it is time they learned.</P><P>Debit and credit – - David Albrecht</P>Be the first to like this post.<br /><p><a href="http://profalbrecht.wordpress.com/2011/10/28/social-media-and-corporate-espionage/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-31536255592689765602011-11-21T13:08:00.000-08:002011-11-21T13:08:00.237-08:00Accountant Day Is November 10 November 1, 2011 by David Albrecht </P><P>Accountant Day is fast approaching.</P><IMG class="size-medium wp-image-5146" title=daydreaming-bookkeeper-by-norman-rockwell alt="" src="http://profalbrecht.files.wordpress.com/2011/11/daydreaming-bookkeeper-by-norman-rockwell.jpg?w=196&h=260" width=196 height=260> "The Bookkeeper," by Norman Rockwell</P><P>November 10 is the day we accountants commemorate a top 25 event in the world’s history–publishing the first book on accounting.</P><P><IMG class="alignright size-thumbnail wp-image-187" title="The Summa" alt="" src="http://profalbrecht.files.wordpress.com/2008/09/pacioli_titrelarge1.gif?w=71&h=96" width=71 height=96>On November 10, 1494, volume 2 of Summa de Arithmetica, Geometria, Proportioni et Proportionalita</EM> (Everything About Arithmetic, Geometry and Proportion) was published. It is in volume 2 of the Summa that Luca Pacioli included a description of the bookkeeping/accounting system of Venice. In honor of this contribution, Pacioli has carried for centuries the title of <STRONG>Father of Accounting.</EM></STRONG></P><P>This year, I’ve decided to stand on the town’s busiest street corner and inspire passers-by reciting the Accountant’s Chant: Debit — credit — hmmm.</P><P>Debit and credit – - David Albrecht</P>Be the first to like this post.Posted in Popular culture | Tagged Accountant day, Accounting Day | 1 Comment</P><BR><br /><p><a href="http://profalbrecht.wordpress.com/2011/11/01/accounting-day-is-november-10/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-5877766710919003662011-11-21T09:06:00.000-08:002011-11-21T09:06:00.257-08:00Incorporate Global Macro Analysis Into Intraday Trading <P>In the world of investing and finance, people tend to think that if you use fundamental analysis heavily in your trading approach that you must be a long-term position trader. Fundamental analysis, of course, is the analysis of global macroeconomic data and developments. Global macro traders then use this big picture fundamental analysis in order to buy assets they believe will appreciate over time, or in order to sell assets they believe will devalue over time.</P><P>If you enjoy studying macroeconomics and keeping in touch with global economic and political developments, but do not enjoy holding positions for several weeks and even months, then you may enjoy a specific trading approach called Global Macro Intraday Scalping. Trading in the foreign exchange market is high risk. Only trade with money you can afford to lose.</P><P><STRONG>How Price Moves</STRONG></P><P>New traders often get very excited about the new strategies. They love to experiment with combinations of moving averages, pivot points, Stochastic indicators, etc. The reality, however, is that indicators are all lagging real-time price movement. Price never makes a 100 pip movement in the foreign exchange market because price hits a moving average of Fibonacci level!! Price moves because of changing fundamentals. Price, in any financial market, is simply a reflection of the market participants’ view of the emerging fundamentals. That means the real mover of price are fundamentals.</P><P><STRONG>Riding the Wave</STRONG></P><P>Using macroeconomic fundamental analysis in your intraday trading is like riding a wave. At any given point in time, there are typically 2-3 major macro themes driving the overall multi-day or multi-week trend. However, these themes can change very easily. Therefore, it is essential to always stay on the right side of the market by staying on top of your analysis.</P><P>For example, as of October 12, 2011, global markets are in a risk appetite environment. Over the last several months, risk aversion was ruling the market. Fears of a Greek default were weighing on investor sentiment heavily. A few weeks ago, it appeared that European banks were severely undercapitalized in the event of a Greek default. Small businesses can often apply for a small business loan application, but these large banks would have a hard time tapping extra liquidity. These fears caused risk assets to fall sharply, and EUR/USD, in particular, fell over 1,000 pips within a few short months.</P><P><IMG class="alignnone size-full wp-image-582" title="Green default fears" alt="greek default chart" src="/greek-default.gif" width=480 height=426></P><P>In the chart above, you can see the intense selling pressure in EUR/USD from a HI of 1.4500 to a low of 1.3110 in the wake of Greek default fears. But then, at the lows of the move, talk began to grow in the EuroZone that there was going to be a bank recapitalization program initiated in order to shore up bank balance sheets and help protect against a run on the banks or complete bank failures in the event of a Greek default. Banks need much more than a small business loan application to help shore up their balance sheets!</P><P>This recapitalization talk helped remove one of the major reasons the market was selling Euros so heavily over the previous few months. When the very reason the market was selling Euros was removed from the equation, it, of course, makes it reasonable that the market would now begin to buy Euros in order to revaluate it in the event of a bank recapitalization program.</P><P>Fundamentals drive price. If you are an intraday foreign exchange trader, consider keeping in touch with the pulse of the global economy in order to guide your intraday trading decision. Trading foreign exchange is high risk, and you should only trade with money you can afford to lose. </P><P>Related posts:</P>Mish’s Global Economic Trend AnalysisForex Market AnalysisRelationships between MarketsForex Trading BlogUFX Bank Online Forex Broker Service: Overview<br /><p><a href="http://feedproxy.google.com/~r/FinancialBloggers/~3/El7losq-weQ/incorporate-global-macro-analysis-into-intraday-trading-581.html" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-67914979064869630132011-11-21T04:37:00.000-08:002011-11-21T04:37:00.402-08:00FASRI Roundtable: Gavin Cassar, Wharton Assistant Professor and Link to Daryl Buck’s RT <P>The FASRI Roundtable series continues at 4pm eastern time on Tuesday, November 8. Our guest speaker will be Gavin Cassar. Gavin has published extensively on issues related to small firms, start-ups, and family firms. His talk is a follow-up to our meeting this past Tuesday with Daryl Buck, Board member, on issues facing private firms. Gavin will provide insight on future research directions in this emerging and increasingly important area. If you were unable to catch Daryl’s Roundtable, you can hear a recording of it by clicking here: http://dl.dropbox.com/u/31770485/Standard-setting%20for%20private%20companies.wmv . </P><P> To participate in the Roundtable, please follow these instructions.</P><P> 1) Go to http://intercall.webex.com anytime after 3:00 pm (New York time) on Tuesday, November 8. </P><P>2) Type in the following meeting number: 598 987 887 and click “Join Now”.</P><P>3) On the next page, fill in your name, email address, and the password “Fasri001” (case sensitive). Then click “Join”. </P><P>4) After joining the meeting, you will be prompted for your telephone number. Insert your telephone number and click the “Call Me” button. Your phone will ring, which you can use to hear and speak. Please remember to put yourself on mute when you are not speaking (can be done by clicking the mic next to your name).</P><P> If you receive an error message or need help, contact me at 203-956-3472.</P><br /><p><a href="http://fasri.net/index.php/2011/11/fasri-roundtable-gavin-cassar-wharton-assistant-professor-and-link-to-daryl-bucks-rt/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-12352373625859763492011-11-21T00:14:00.000-08:002011-11-21T00:14:00.541-08:00Miscellany October 28, 2011 by David Albrecht </P><P><IMG class="alignright size-medium wp-image-4555" title=miscellany alt="" src="http://profalbrecht.files.wordpress.com/2011/08/miscellany.jpg?w=176&h=240" width=176 height=240>Miscellany — interesting items that caught my eye during the week.</P><P>Jonathan Weil shows why he is one of the premier journalists writing about accounting in, “Goldman Sachs Envy Gains New Meaning at Big Four.” Weil shows several examples of the revolving door between the large accounting firms and their regulators on the PCAOB. There are stinky conflicts of interest.</P><P>Adam Jones, accountancy correspondent for the Financial Times</EM>, writes about new KPMG International chairman Michael Andrew in “KPMG vows to remain a multi-disciplinary firm.” In this interview, Andrew ridicules all non-Big 4 accounting firms,</P><BLOCKQUOTE readability="9"><P>He also lashed out at a Commission proposal to force the Big Four to share some audits with smaller rivals. “Can you imagine a second-tier firm auditing a global bank at a time when there is already a lack of confidence in the marketplace?”</P><P>He added: “They simply don’t have the skills or the market expertise.” </P><P>He also accused some smaller rivals of being “quite lazy” about investing in their businesses.</P></BLOCKQUOTE><P>Mr. Andrew is a jerk. But Steve Martin was funnier at it.</P><P>Jones has another story on the issue, “Auditing has moved into the realms of sitcom.” It’s worth a read.</P><P>Stephanie Sammons, of Social Media Examiner</EM>, writes about, “5 Simple Steps for Improving Your LinkedIn Visibility.” Read it. Do it.</P><P>Tom Selling is terrific when he writes about IFRS adoption issues, as he does in, “Will the SEC Sneak IFRS in Through the Back Door?“ Selling is sounding more pessimistic about how the nefarious SEC might sneak in IFRS, despite all reason and common sense (as well as almost every accountant and investor) being against it.</P><P>I have little faith. The commissioners of the SEC are political appointees, and Mary Schapiro has been a willing accomplice to Obama administration policy. She has her marching orders to install IFRS, and she is loyal to the hand that feeds her.</P><P>Mark Schaefer of {Grow} has another post out on Klout, “Kould Kare Less.”</P><P>His Klout score is high, but he doesn’t care. Mine isn’t, and I don’t care either. Yet, many do.</P><P>Debit and credit – - David Albrecht</P>Be the first to like this post.<br /><p><a href="http://profalbrecht.wordpress.com/2011/10/28/miscellany-7/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-90987653214364773562011-11-20T19:40:00.000-08:002011-11-20T19:40:00.519-08:005 Must See Websites When The Time Comes to Renew Your Car Insurance <P>There is no doubt that it used to be extremely hard to shop for car insurance. You would have had to call quite a few different insurance companies in order to compare plans, rates, and discounts. Today it has become a lot simpler. With the advent of the Internet, it is now possible to use online tools in order to access the information that you need about car insurance. Online tools make shopping for car insurance easier and faster. Some of the newer tools for car insurance include car insurance calculators. Car insurance calculators make looking for the lowest car insurance price easier. You can use car insurance calculators to obtain an estimate of what you may pay for your car insurance. In addition, they can help you figure out how much coverage you can afford to obtain.</P><P>In order to get the information that you want from the CarInsurance.com insurance calculator, you will need to answer a few questions about your situation. For example, you will need to provide information about whether you rent or own your home, the number of kids that you have in your household and your marital status. You will also need to provide information about whether you have health insurance, your age, your education and the type of vehicle that you want to insure. It should take less than ten minutes to complete the form and obtain the rates of multiple car insurance companies from CarInsurance.com.</P><P>Bumper to Bumper Basics is an insurance calculator that is provided by the insurance company Allstate Insurance. By using Bumper to Bumper basics, you will be able to find out what the car insurance rates will be if you decide to obtain car insurance from Allstate. In order to get this type of information you will need to provide information about you and any other drivers who will be on your car insurance policy. You will also need to provide information about where your car will be parked.</P><P>Cars Direct provides a rate quote assessment for people shopping for car insurance. This is an independent company so all rates are not biased. You simply need to fill out a form on their website in order to obtain the information that you want. You will need to provide information about your car and any other drivers. This information will be used to calculate the potential rates from multiple companies. You will also receive information about any potential discounts or deals.</P><P>The Coverage Guide is an online tool that is provided by Hartford Insurance. It uses the information you provide to tell you what the rates will be based on your coverage and financial needs.</P><P>This is a simple way for you to obtain different rate quotes with a quick estimate feature. You an also obtain personalized quotes from the personalized quote feature.</P><P>Britney Baker writes about auto insurance comparisons over at Auto Insurance Comparison .org.</P><P>Related posts:</P>Home Insurance BlogAXA Insurance BlogInsurance Specialists BlogFamilies.com Insurance BlogNew Zealand Life Insurance Blog<br /><p><a href="http://feedproxy.google.com/~r/FinancialBloggers/~3/pVxU8ICw33A/5-must-see-websites-when-the-time-comes-to-renew-your-car-insurance-571.html" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-43720618127398310332011-11-20T14:44:00.000-08:002011-11-20T14:44:00.396-08:00If you file it (on EDGAR), will they come? <P>Have you ever wondered how much investors actually use SEC filings? I just read a paper with awesome new data that speaks to this question. The paper is entitled, “The Demand for Mandatory Disclosure: Evidence from Investors’ Use of the EDGAR Database,” and is coauthored by Michael Drake (BYU), Darren Roulstone (OSU), and Jacob Thornock (Univ. of Washington). The authors obtained the EDGAR server logs for the first half of 2008, “which record each ‘click’ … by a user to acquire a specific filing from EDGAR.” The dataset allows them to observe who is making the request (based on a partial IP address), when they make the request, which firm the request relates to, and the specific filing and filing date being requested. I know—wouldn’t you love to have this dataset?!</P><P>This paper reports data on the forms/filings that are most often requested and their relationship to firm information environment, extreme firm performance, and the sophistication of the investor base. Among other things, we learn that more than a million requests for SEC filings occur on a daily basis. We learn that 10% of the most highly demanded form types represent 95% of the requests. With over 200 forms/filings required by the SEC, this makes you wonder about the other 180 forms/filings. In fact, when I saw that statistic, it made me think of the disclosure framework project, which I know is trying to grapple with information overload. Wouldn’t you love to know which footnotes in a 10k are most often requested? Unfortunately, the data in this paper is not that granular.</P><P>Regardless, I thought I would post this paper for your general enjoyment. I also posted this paper because it reminds me of the usefulness of thinking outside of the data we normally use, and instead thinking of where you might be able to get data that would help you answer the questions you really care about. I’m sure there’s a string of papers that will come from this data, and I’m looking forward to seeing those papers. In the meantime, feel free to post your thoughts and reactions to this paper right here, including any thoughts on the questions you might ask if you had such a dataset. I look forward to your comments!</P><br /><p><a href="http://fasri.net/index.php/2011/10/if-you-file-it-on-edgar-will-they-come/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-12234417910257014932011-11-20T11:29:00.000-08:002011-11-20T11:29:00.364-08:00FASRI Roundtable: Daryl Buck, FASB Member <P>The FASRI Roundtable series continues at 4pm eastern time on Tuesday, November 1. Our guest speaker will be Daryl Buck, one of the newest Board members of the FASB. Mr. Buck brings a strong private company financial reporting perspective to the FASB. Prior to joining the Board, he spent eighteen years as Senior Vice President & Chief Financial Officer of Reasor’s Holding Company, a private company with $400 million in annual sales. In addition to leading the company’s financial, tax, and treasury functions, he advised senior management and the Board of Directors about the financial and tax implications of strategic opportunities and acquisitions, playing a key role in setting its strategic direction. Mr. Buck’s topic will be on standard setting for private companies, which is a topic that has recently garnered significant attention in the financial press. If you have interest in conducting research on private companies, the information from the Roundtable is likely to provide some interesting insight for your research.</P><P>To participate in the Roundtable, please follow these instructions.</P><P>1) Go to http://intercall.webex.com anytime after 3:00 pm (New York time) on Tuesday, November 1. </P><P>2) Type in the following meeting number: 599 285 948 and click “Join Now”.</P><P>3) On the next page, fill in your name, email address, and the password “Fasri001” (case sensitive). Then click “Join”. </P><P>4) After joining the meeting, you will be prompted for your telephone number. Insert your telephone number and click the “Call Me” button. Your phone will ring, which you can use to hear and speak. Please remember to put yourself on mute when you are not speaking (can be done by clicking the mic next to your name).</P><P>If you receive an error message or need help, contact me at 203-956-3472.</P><P>Lynn</P><br /><p><a href="http://fasri.net/index.php/2011/10/fasri-roundtable-daryl-buck-fasb-member/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-11361987604660012712011-11-20T08:13:00.000-08:002011-11-20T08:13:00.404-08:00More SEC Reports on IFRS Coming: Will they be Genuine Analysis or Just More Dithering? <P>The minutes of the latest meeting of the SEC Staff with the CAQ SEC Regulations Committee provide an indication of what may be coming soon on the IFRS adoption front:</P><P>"Jill Davis [Associate Chief Accountant in the Division of Corporation Finance] noted that the comment letters provided to the SEC staff on the Staff ["Condorsement"] Paper have expressed overall support for the longer-term objective of moving toward a single, high quality set of standards that are applied consistently on a global basis</EM>.</P><P>Ms. Davis also noted that the SEC staff plans to issue two additional Staff Papers during 2011 on (1) a principles level analysis</EM> of US GAAP as compared to IFRS and (2) an analysis of the application of IFRS in practice. The SEC staff also is considering issuing a report by the end of the year that would summarize observations and information gained through its IFRS Work Plan. [italics supplied]</P><P>If you are a regular reader of my blog, you would know that I think that the Staff is either just spinning its wheels, or it has decided that it has come time to spin out yet more propaganda to support IFRS adoption. I italicized those portions of Ms. Davis's remarks that are my particularly hot buttons.</P><P>Single set of standards – </EM>There isn't even a single set of IFRS, and there still won't be, even if the U.S. swallows IFRS hook, line and sinker. This is due in part because of the multiple carve-outs that could live as long as IFRS lives. But it is also true because even within 'pure' IFRS, the notion of a single set of standards is a fiction: there are far too many free choice and built-in opportunities to manage earnings. Stated another way, there may be a single system</EM> accepted by a few countries called IFRS, but it surely is not a single set of standards</EM>.</P><P>High quality standards </EM>–I'm sure that Indian regulators, with its 65 carve-outs utilized by thousands of companies, believe that the Indian version of IFRS is high quality, because it accomplishes policy objectives set for India; and the same goes for China, which regards it abridged version of IFRS to be just as good as the real thing. The EU is pretty close to genuine IFRS, but is it much different from India or China? It has only one carve out utilized by only about twenty companies, but some of these companies are the GIANT banks whose failure could bring the global economy to its knees, yet once again.</P><P>I'll have more to say about "high quality" in my next post, when I discuss the concept of "investor protection." But for now, I'll just observe that high quality is context-dependent; and it behooves the SEC to give us at least some hint, finally, as to what "high quality" means forthe SEC's mission to protect U.S. investors.</P><P>(Accounting) Principles – </EM>This would be a good time to mention the online availability of the text of my remarks at least week's American Accounting Association 2011 Northeast Region meeting (Whither IFRS Adoption: the Answer is in the Details</EM>). </EM></P><P>During the Q & A afterwards, one professor in the audience asked what advice I had for his doctoral student, who was seeking to write a dissertation on a similar topic to my remarks. I won't go into my response, but it got me to thinking why the SEC has not commissioned academics to undertake some of their research projects – like the two reports Ms. Davis said the Staff is planning to deliver by the end of this year. Or how about commissioning a comprehensive and independent analysis of the comment letters? </EM></P><P>For one thing, the SEC Staff has little or no collective background in conducting accounting research, and for another it is known to be extremely shorthanded. Cynical me suspects that the SEC is unwilling to risk losing control of the outcome of their "analysis."</P><P>In any case, these reports are going to be too little, and too late. The SEC should have made a U-turn on its IFRS adoption roadmap years ago. But, let's play along, and hark back to the Staff's 2003 report to Congress on a "Principles-Based Accounting System." In many respects, it is a horrible document, but two clear outcomes were: it endorsed a more consistent asset/liability view to standard setting; and it called for a revamped and strengthened conceptual framework. It is undeniable that neither Board has made adequate, or even significant, progress on either front.</EM></P><P>The Staff knows US GAAP and IFRS well enough to anticipate the only legitimate conclusion that can come from of an exercise in which IFRS and U.S. GAAP is compared and contrasted – either at a "principles level" or any other level. Both sets of standards contain so many internal inconsistencies and differences between them to dash any realistic hope that convergence to "high quality" (however defined) can occur within a reasonable timeframe. How much of those real differences will the Staff gloss over by some sort of "principles level analysis"? Answer: as much as the Staff wants.</P><P>The public interest and investors would be better served if the Staff were to finally acknowledge that IFRS is not clearly superior to U.S. GAAP; and, eight years after its report to Congress, the necessary conditions for principles-based standard setting to occur (especially at the IASB) are still not in place.</P><P>I haven't read more than a few of the comment letters to which Ms. Davis is referring, but from the ones I have read, the sense of their references to "a single, highly quality set of standards that are applied consistently on a global basis" is as something distant and desirable, yet for all practical purposes, unattainable. Given the recent track record on convergence, the current state of the economy, the problems with IASB governance and many other factors convincingly argue that it should be put on the back burner for at least a few years.</P><P>No future SEC Staff report can controvert the reality on the ground that IASB accounting standard setting and convergence are in a state of chaos, with nothing like "principles" or consistent "objectives" to orient them. The prospects for anything approaching a "single, high quality set of standards that are applied consistently on a global basis" in any of our lifetimes are dim to nonexistent.</P><br /><p><a href="http://feedproxy.google.com/~r/typepad/theaccountingonion/~3/J8fIQR5WHmk/more-sec-reports-on-ifrs-coming-will-they-be-genuine-analysis-or-just-more-dithering.html" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-81326260914522709642011-11-20T04:51:00.000-08:002011-11-20T04:51:00.955-08:00Will the SEC Sneak IFRS in Through the Back Door? Will the SEC Sneak IFRS in Through the Back Door? - The Accounting Onion<body class="layout-three-column">The Accounting OnionTom Selling, PhD, CPA - - Peeling away financial reporting issues one layer at a time. HomeAboutTrainingTopical IndexArchives<img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC7\" alt="My Photo" />LinksWelcome to the Accounting OnionSample In-house Training AgendasPosts by TopicMy WebsiteSubscribe<p><img src="/feed-icon16x16.png" alt="" style="vertical-align:middle;border:0"/> Subscribe in a reader</p><p><img src="/add.gif" width="104" height="17" style="border:0" alt="Add to Google Reader or Homepage"/></p><p><img src="/addtomyyahoo4.gif" alt="" style="border:0"/></p><p><img src="/submodern11.gif" alt="Subscribe in Bloglines" style="border:0"/></p><p>Or Subscribe via Email<br>Enter your email address:</p><p></p><p>Delivered by FeedBurner</p> <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC7\" width="120" height="240" alt="Virtual Phone Service for Your Business" border="0"/> CategoriesAccounting ConceptsAuditingBooksBusiness combinationsCommentaryCompensation, pensions and other benefitsConceptual frameworkContingent LiabilitiesCredit ratingsCurrent AffairsEITFFASBFinancial AnalysisFinancial instrumentsForeign OperationsGoodwillIFRSIntercorporate investmentsInterest CostsInternationalR&DRecent DevelopmentsRevenue RecognitionSECSOX« The PCAOB Should Name Names – All of Them |Main| More SEC Reports on IFRS Coming: Will they be Genuine Analysis or Just More Dithering? »</p>October 26, 2011Will the SEC Sneak IFRS in Through the Back Door?<p>I have been hearing rumors that the SEC is getting ready to come out with its IFRS adoption plan any time now. Richard Breeden, a distinguished former SEC chair, and now the head of a $2 billion international investment fund, stated that if the SEC were to adopt IFRS, "it would be the darkest day in the history of the SEC."* </em>Like it nor not, though, there is no denying that it will be the most radical and riskiest change to accounting standards since the establishment of the federal securities laws in 1933.</p><p>The latest indication of what could be in store for us is set forth in the May 26, 2011 SEC Staff paper, Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers: Exploring a Possible Method of Incorporation, </em>informally referred to as the "condorsement" proposal. To the staff's credit, it finally conceded that a complete abrogation of U.S. GAAP in favor of IFRS as established by the IASB has absolutely no chance of succeeding.</p><p> But, seemingly out of thin air, it now proposes a very curious restructuring: the FASB would retain its title as the standard setter for U.S. GAAP, but it would be emasculated. It would be prohibited from adding any new project to its agenda, unless it would be to endorse an existing IASB standard, or to work with the IASB on one of a project of the IASB's own making. In this way, the FASB's activities would be limited to only incorporating IFRS standards into the FASB's Accounting Standards Codification over just a few years' time. Hardly anyone feels that this is realistic, or shall I say, "justifiable."</p><p> <strong>The Back Door Gambit </strong></p><p> "Justifiable" is a key word, because I believe that the SEC is planning to proceed with a condorsement policy without adequate evaluation of the costs and benefits. This is because the new proposal is deviously structured such that <strong>it could be implemented without any rulemaking by the Commission itself.</strong> </em>This is especially alarming in light of a recent court ruling which makes clear that the Commission must accompany all rulemaking with a rigorous, reasonably complete and unbiased evaluation of costs and benefits.</p><p> If IFRS adoption were to take effect, by a process that circumvents rulemaking, then that by itself would make for "the darkest day in the history of the SEC." And, indeed, it now seems that IFRS could only be possible without rulemaking; because the Staff has absolutely no idea how it will be able to conjure a justification with more than a snowball's chance in hell of passing muster in a court of law.</p> The CFA Institute, representing over 100,000 investment professionals worldwide has expressed similar concerns regarding the SEC's obligation to reasonably consider all of the pros and cons of IFRS adoption. In a recent comment letter, the Institute reminds the SEC Staff that it hasn't done much homework at all. In fact, as we sit here going on two years after the announcement of that work plan, little has yet to be been done to: Define what "high quality standards" means, and whether IFRS standards measure up; Address whether the IASB has made needed improvements to its infrastructure and governance; Specify an enforcement mechanism for IFRS; and Specify how endorsement of IFRSs would actually take place (and by implication lead to the ambitious goal of generating financial statements that simultaneously comply with US GAAP and IFRS).<p> "I should add to the Institute's concerns that the staff work plan provides no indication whatsoever as to how the SEC will assess the economic benefits of IFRS adoption – either quantitatively or qualitatively. The DC District Court's decision explains in no uncertain terms that rulemaking must be accompanied by a clear-eyed assessment of benefits, yet nothing in the Staff's planning documents indicate that such an analysis is in process, or will ever be produced</em>.</p><p><strong>Send in the Shills </strong></p><p>Yet, despite the fact that the SEC clearly has no intention of honoring its word, and there is overwhelming opposition to IFRS adoption, many fear that the decision to pre-empt real answers to these threshold questions is soon at hand. Earlier this month, Hans Hoogervorst and Harvey Goldschmid, IASB chair and CAQ board member, respectively, attempted to provide momentum to the Staff's condorsement proposal with keynote speeches at the IFRS Foundation/AICPA Conference in Boston. Their unqualified exhortations to the SEC to move ahead on IFRS adoption is exactly what one would have expected from the most visible paid promoters of IFRS at a conference jointly produced and staged by the two most active and powerful IFRS lobbying groups. The biased conclusions of Messrs Hoogervorst and Goldschmid were synthesized from an admixture of vague generalities, selective use of the facts, cherry picking of academic research, and biased speculations. (These are not empty accusations; I'll be discussing these in detail in posts to follow.)</p>* * * * *</p><p>The real answers to IFRS adoption questions are in the details. I am certain that we are never going to get those details that the public is entitled to from the SEC or the special interests that only want to line their pockets at more expense to shareholders and investors.</p><p>If IFRS gets shoved down the throats – without formal rulemaking – of the thousands of corporations that want this whole thing to go away, and the millions of investors who deserve better, then the next thing to do is to call for Mary Schapiro's resignation.</p><p>-------------------------</p><p>*As reported to me by Lynn E. Turner, former SEC Chief Accountant, who two years ago attended the semiannual meeting of the Council for Institutional Investors in Los Angeles where Mr. Breeden spoke and made this statement. Among other reasons, Mr. Breeden believes US GAAP provides him and his portfolio managers with better data.</p>Posted in IFRS, SEC | Permalink</p>TrackBack<p>TrackBack URL for this entry:<br />http://www.typepad.com/services/trackback/6a00e393316a76883401539299b149970b</p><p>Listed below are links to weblogs that reference Will the SEC Sneak IFRS in Through the Back Door?:</p> Comments Verify your Comment Previewing your CommentPosted by: | </p> <p>This is only a preview. Your comment has not yet been posted.</p> <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC7\spinner.gif" alt="Working..." /> Your comment could not be posted. Error type: Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment The letters and numbers you entered did not match the image. Please try again.</p> <p>As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.</p> <p>Having trouble reading this image? View an alternate.</p> <img id="captchaImg" /></p> <p> </p> <p> <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC7\spinner.gif" alt="Working..." /> </p> Post a comment Comments are moderated, and will not appear until the author has approved them. </p> (You can use HTML tags like <b> <i> and <ul> to style your text. URLs automatically linked.) </p> <p>Your Information</p> <p> (Name and email address are required. Email address will not be displayed with the comment.) </p> <p> Name is required to post a comment </p> <p> Please enter a valid email address </p> <p> Invalid URL </p> <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC7\spinner.gif" alt="Working..." /> Recent PostsMore SEC Reports on IFRS Coming: Will they be Genuine Analysis or Just More Dithering?Will the SEC Sneak IFRS in Through the Back Door?The PCAOB Should Name Names – All of ThemWhy Do Accounting Academics Blog Less Than Other Academics?The IASB's Revisions to Pension Accounting Rules are Based on a Preposterous PremiseIASB Tried to Keep its Greek Bond Letter a Secret – But it Leaked!Mandatory Audit Firm Rotation and Greek Bond Accounting: What Might Have Happened?Peeling the Onion on the Accounting for Greek BondsLet the "Condorsement" Games BeginA Much Needed Accounting Lesson for Two Senators Tweet <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC7\" width="125" height="125" alt="Try RingCentral Fax FREE for 30 Days" border="0"/> <img src="C:\Program Files\ABS\Auto Blog Samurai\data\accounting information\ACC7\" width="160" height="600" alt="10% Off Carrot Ink Products Today! 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"https://sb" : "http://b") + ".scorecardresearch.com/beacon.js'%3E%3C/script%3E"));COMSCORE.beacon({ c1: 2, c2: "6035669", c3: "", c4: "http://accountingonion.typepad.com/theaccountingonion/2011/10/will-the-sec-sneak-ifrs-in-through-the-back-door.html", c5: "", c6: "", c15: ""});</body><br /><p><a href="http://feedproxy.google.com/~r/typepad/theaccountingonion/~3/xZIyjn-MSAs/will-the-sec-sneak-ifrs-in-through-the-back-door.html" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-13485478693110092572011-11-20T01:17:00.000-08:002011-11-20T01:17:00.047-08:00Trying to appreciate new lease depreciation decision <P>I am getting ready to teach the leasing module in my MAcc class. I was going over the decisions to date on the FASB web, and I found the following:</P><P>“Lease payments should include amounts expected to be payable under residual value guarantees… The Boards discussed the subsequent measurement of residual value guarantees by lessees … and tentatively decided that:</P><P>The amounts expected to be payable under residual value guarantees included in the measurement of the lessee’s right-of-use asset should be amortized consistently with how other lease payments that are included in the measurement of a right-of-use asset are amortized. That is, amortization should be on a systematic basis from the date of commencement of the lease to the end of the lease term…”</P><P>So let’s suppose the guaranteed residual = expected residual = $10,000. At the end of the lease, the lease liability will be $10,000. The expected cash payment to the lessor is zero, and it will be zero if the asset is worth at least $10,000. But the asset’s carrying value is zero. This means a gain when the asset is returned.</P><P>Under current accounting for capital leases with guaranteed residual value, the residual value is used as salvage value when calculating depreciation for the leased asset. If I am reading this tentative decision correctly, all future leases will have to use zero as the salvage value. That will generally produce overstated depreciation expenses over the lease term followed by a gain at the end of the lease. Why would the Boards do this? Do they mistrust the accuracy of residual values? Or am I misreading the words?</P><br /><p><a href="http://fasri.net/index.php/2011/10/trying-to-appreciate-new-lease-depreciation-decision/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-37034191467604465982011-11-19T20:56:00.000-08:002011-11-19T20:56:00.117-08:00Are AFS Securities Tested for Impairment Anymore in IFRS? <P>Maybe I’m missing something here, but I stumbled across guidance in my technical accounting research class last week that made me wonder whether AFS securities are tested for impairment anymore in IFRS. If I’m misunderstanding this, please help me out.</P><P>In the old IAS 39, Financial Instruments: Recognition and Measurement</EM>, unrealized gains and losses in available-for-sale securities were recognized in OCI. However, if an impairment loss occurred for that AFS security, the cumulative loss recognized in OCI was reclassified from equity to profit and loss (paragraphs 55(b) and 67-70). Moreover, impairment losses recognized in profit and loss for an AFS equity security could not be reversed through profit and loss, while subsequent increases in fair value on previously impaired AFS debt securities could be reversed through profit and loss in some circumstances.</P><P>In the new IAS 39, Financial Instruments: Recognition and Measurement,</EM> and the new IFRS 9, Financial Instruments</EM>, there is no longer any such label as available-for-sale securities. In addition, the IASB decided that</P><BLOCKQUOTE readability="7"><P>…a gain or loss on those investments should be recognised once only; therefore, recognising a gain or loss in other comprehensive income and subsequently transferring it to profit or loss is inappropriate (IFRS 9, BC5.25(b)).</P></BLOCKQUOTE><P>From what I gather, the IASB was trying to move away from so many categories for financial instruments (e.g., trading, held-to-maturity, available-for-sale) and they didn’t want to deal with issues such as recycling OCI changes back into profit and loss. So where does that leave us with AFS securities in IFRS?</P><P>Although there is no longer a label for available-for-sale securities, you can still find the same basic accounting permitted within IFRS 9. First, par. 4.1.1 would allow a financial asset to be measured at fair value on the Statement of Financial Position, while par. 5.7.5 would allow an irrevocable election to present in OCI subsequent changes in the fair value of that investment if it is an equity instrument. So far, the same AFS treatment is available under the new guidance, at least for equity investments. But here’s the kicker. The impairment guidance in IFRS 9 and IAS 39 only applies to financial assets measured at amortized cost, as shown here:</P><BLOCKQUOTE readability="6"><P>An entity shall assess at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets measured at amortised cost is impaired (IAS 39, par. 58).</P></BLOCKQUOTE><P>At first, I was very surprised to think that the IASB no longer requires an impairment test for equity securities measured at fair value through OCI. In fact, I thought I was just missing something. But then I read further into the basis for conclusions in IFRS 9:</P><BLOCKQUOTE readability="8"><P>In addition, the Board noted that recycling of gains and losses to profit or loss would create something similar to the available-for-sale category in IAS 39 and would create the requirement to assess the equity instrument for impairment, which had created application problems (IFRS 9, BC5.25(b)).</P></BLOCKQUOTE><P>Because of this reasoning, the IASB seems to have decided not to test for impairment AFS equity securities measured at fair value through OCI. Does this surprise anyone else? Does it seem odd given that US GAAP clearly requires an impairment test for AFS securities, both debt and equity types (ASC 320-10-35-17) ? Perhaps I am just completely missing something, and if so, please chime in with your comments. Is this issue just no longer a big deal? Or was the big deal related only to AFS debt securities and not AFS equity securities? Maybe I need to go find something else to think about for a while…</P><br /><p><a href="http://fasri.net/index.php/2011/11/are-afs-securities-tested-for-impairment-anymore-in-ifrs/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8585082709477065779.post-29629346614385568642011-11-19T16:11:00.000-08:002011-11-19T16:11:00.072-08:00A new dimension to disclosure reform <P>{This post has been bumped up}</P><P>One of the questions around the disclosure framework is how the FASB will coordinate with the SEC and IASB. One issue that may make this question even more interesting is that a new group has potentially inserted itself in the discussion. Last month, the PCAOB released a concepts statement outlining proposed revisions to the auditor reporting model. In their outreach activities, the PCAOB conducted a survey of various investor groups to see what they believe auditors should discuss in a revised report. A majority of respondents indicated that auditors should discuss:</P><P>• Areas with the greatest financial statement and audit risk (77%)<BR>• Significant estimates and judgments made by management as well as auditor assessment of those (79%)<BR>• Quality not just acceptability of accounting policies (65%)<BR>• Results of sensitivity analyses in areas of judgment (65%)<BR>• Unusual transactions, changes in segment reporting, restatements, and changes in entities consolidated (67%)</P><P>One of the more contentious proposals is an Auditor Discussion and Analysis (ADA) section in the 10-k in which the auditor would discuss these items. Investors strongly support this option but not surprisingly, preparers, auditors, and audit committees are opposed. They contend that these items should be communicated directly to investors by management/audit committee. Indeed, all of these items are required within MD&A and the financial statements themselves so auditor discussion would create some level of redundancy. But these items also mimic the categories discussed in the disclosure framework project.</P><P>It is clear that investors are dissatisfied with disclosures in these areas. Faced with an option like the proposed ADA section, I would think that preparers and auditors would be even more accepting of disclosure reform as an alternative. Could the FASB and PCAOB coordinate in this area or are these projects better addressed separately?</P><br /><p><a href="http://fasri.net/index.php/2011/11/a-new-dimension-to-disclosure-reform/" target="_blank" rel="nofollow">View the original article here</a></p>Unknownnoreply@blogger.com0