The Effects Of LIFO (Last In, First Out) Repeal On The Entertainment Industry

Peter Harris

doi:10.19030/jber.v11i1.7518

The Effects Of LIFO (Last In, First Out) Repeal On The Entertainment Industry

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v11i1.7518 ◽

2012 ◽

Vol 11 (1) ◽

pp. 11

Author(s):

Peter Harris

Keyword(s):

Accounting Standards ◽

Financial Accounting ◽

Entertainment Industry ◽

Financial Accounting Standards Board ◽

Complete Elimination ◽

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Political Pressure ◽

Obama Administration ◽

The Us

The Last in, First Out Method (LIFO) is presently under severe scrutiny from the financial community, which may soon culminate in its repeal as an acceptable accounting method. There are pressures from the SEC in conjunction with the International Financial Accounting Standards Board (IFRS) to standardize accounting practices worldwide. In addition, there is political pressure imposed by the US Obama administration to raise additional revenues. Both groups strongly oppose LIFO, raising a strong possibility that its complete elimination as an accounting method will occur by as early as 2014. This paper addresses the effects of LIFO repeal on the entertainment industry. The result will probably be the elimination of the Lower of Cost or Market Method, which is presently adapted by many non-LIFO firms, and also represents a major tax loophole for those who use it, including the entertainment industry.

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The Theoretical Defenses Of The Last In First Out Inventory Methods

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v12i1.8376 ◽

2013 ◽

Vol 12 (1) ◽

pp. 43

Author(s):

Peter Harris ◽

William Stahlin

Keyword(s):

Financial Reporting ◽

Accounting Standards ◽

Financial Accounting ◽

Financial Accounting Standards Board ◽

Complete Elimination ◽

Political Pressure ◽

The U.S

The Last in First out Method (LIFO) is presently under severe scrutiny from the financial community which may soon culminate in its repeal as an acceptable accounting method. There are pressures from the SEC in conjunction with the International Financial Accounting Standards Board (IFRS) to standardize accounting standards worldwide. In addition, there is political pressure imposed by the U.S. administration to raise additional revenues. Both groups strongly oppose LIFO, raising a strong possibility of its complete elimination. This paper addresses the reasons defending LIFO as an acceptable accounting method strictly from a financial reporting perspective.

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THE EVOLUTION OF THE RELATIONSHIP BETWEEN THE US FINANCIAL ACCOUNTING STANDARDS BOARD AND THE INTERNATIONAL ACCOUNTING STANDARD SETTERS: 1973–2008

Accounting Historians Journal ◽

10.2308/0148-4184.39.1.1 ◽

2012 ◽

Vol 39 (1) ◽

pp. 1-51 ◽

Cited By ~ 12

Author(s):

Robert J. Kirsch

Keyword(s):

Accounting Standards ◽

Financial Accounting ◽

Working Relationships ◽

International Accounting ◽

International Accounting Standards ◽

Financial Accounting Standards Board ◽

Accounting Standard ◽

Staff Members ◽

The Us ◽

The Relationship

ABSTRACT Utilizing archival materials as well as personal interviews and correspondence with personnel of the Financial Accounting Standards Board (FASB) and International Accounting Standards Committee/Board (IASC/B), including former Board chairmen and staff members, this paper examines the development of the working relationships between the FASB and the IASC/B from their earliest interactions in 1973 through the transformation of the IASC into the IASB and the Convergence Program rooted in the 2002 Norwalk Agreement up to 2008.

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Proposed Lease Accounting For Lessees

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v9i1.941 ◽

2011 ◽

Vol 9 (1) ◽

Cited By ~ 1

Author(s):

Stuart Shough

Keyword(s):

Accounting Standards ◽

Financial Accounting ◽

International Accounting ◽

International Accounting Standards ◽

Financial Accounting Standards Board ◽

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Accounting Model ◽

Lease Accounting ◽

International Accounting Standards Board

On August 17, 2010, the Financial Accounting Standards Board and the International Accounting Standards Board jointly issued exposure drafts proposing a new accounting model for leases. This paper explains how a lessee would account for leases under this proposal.

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The Steep Rise Of Gift Card Purchases By The Consumer Is Changing The Method Of Accounting And Reporting Of Gift Card Income By Corporate Retailers

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v6i4.2405 ◽

2011 ◽

Vol 6 (4) ◽

Cited By ~ 5

Author(s):

Carla Feinson

Keyword(s):

State Legislatures ◽

Accounting Standards ◽

Financial Accounting ◽

Annual Reports ◽

Financial Accounting Standards Board ◽

Font Size ◽

Publicly Traded ◽

Accounting Disclosures ◽

Reporting Requirements ◽

Gift Card

The increasing popularity of gift card purchases by consumers and the corresponding increase in gift card sales in the retail industry has triggered changes in accounting disclosures and reporting requirements. The Financial Accounting Standards board, the Security and Exchange Commission and individual state legislatures have all begun to focused their attention on the various issues that are continually coming to the forefront as a result of the continuing rise in gift card transactions. The promulgations of these authoritative bodies have in turn affected the format and wording of the disclosures that are found in the annual reports or SEC filings of publicly held retail companies. An examination of 75 publicly traded retailers not only shows the similarities and differences of how gift card sales have affected disclosures but also how the very nature of gift card contracts and the ramifications of gift card sales has led to so many specific reporting and accounting difficulties.

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Goodwill Impairment: A New Window For Earnings Management?

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v8i2.669 ◽

2010 ◽

Vol 8 (2) ◽

Cited By ~ 1

Author(s):

Yousef Jahmani ◽

William A. Dowling ◽

Paul D. Torres

Keyword(s):

Earnings Management ◽

Balance Sheet ◽

Accounting Information ◽

Accounting Standards ◽

Financial Accounting ◽

Financial Accounting Standards Board ◽

Font Size ◽

Rates Of Return ◽

Public Companies ◽

Goodwill Impairment

The Financial Accounting Standards Board promulgated standard No. 142 in an attempt to improve the understandability of accounting information.  This new rule eliminated the practice of automatically amortizing goodwill.  No. 142 requires public companies to test goodwill for possible impairment at least annually.  An unintended consequence of this new standard is the opportunity for companies to use it in earnings management.  To test the possibility that the rule is being used for this purpose, a sample of companies was chosen, all of which had amounts of goodwill on their balance sheet during the 2003-2005 interval.  The results reveal that the number of companies experiencing losses or low rates of return on total assets who actually impaired goodwill was statistically insignificant during the period under consideration.  Thus, the results strongly suggest that companies are using No. 142 in an attempt to manage the volatility of earnings.

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The Joint FASB/IASB Lease Project: Discussion And Industry Implications

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v9i9.5633 ◽

2011 ◽

Vol 9 (9) ◽

pp. 29 ◽

Cited By ~ 1

Author(s):

John Kostolansky ◽

Brian Stanko

Keyword(s):

Balance Sheet ◽

Accounting Standards ◽

Financial Accounting ◽

International Accounting Standards ◽

Financial Accounting Standards Board ◽

Font Size ◽

Operating Leases ◽

Accounting Rules ◽

The Impact ◽

Lease Accounting

Over several decades, the Financial Accounting Standards Board and International Accounting Standards Board have enacted numerous changes to the controversial lease accounting rules. As currently prescribed, operating leases are treated as rental arrangements whereby the lessee does not record a liability - a situation generally referred to as off-balance sheet financing. In an attempt to increase transparency and comparability, the FASB and IASB will soon require all leases to be capitalized. This paper quantifies the impact of the new leasing standard on the financial statements and ratios of the firms and industries represented in the S&P 100 under a variety of discount rates.

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A Research Note On The Issue Of Non-Articulation And The Method Used To Calculate Net Operating Cash Flow

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v25i1.1048 ◽

2011 ◽

Vol 25 (1) ◽

Cited By ~ 2

Author(s):

Terry J. Ward ◽

Jon Woodroof ◽

Benjamin P. Foster

Keyword(s):

Cash Flow ◽

Indirect Method ◽

Direct Method ◽

Accounting Standards ◽

Cash Flows ◽

Financial Accounting ◽

Financial Accounting Standards Board ◽

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Operating Cash Flow ◽

Statement Of Cash Flows

Using a proxy for nonarticulation, prior researchers found evidence that many companies using the indirect method of reporting net cash flow from operations have a significant level of nonarticulation.  The purpose of this study is to determine if companies using the direct method of reporting net cash flow from operations experience significantly lower levels of nonarticulation than companies that use the indirect method of reporting net cash flow from operations.  Results show that companies using the direct method have significantly less nonarticulation than companies using the indirect method.  This finding suggests that the Financial Accounting Standards Board (FASB) should consider requiring companies to use the direct method of preparing the Statement of Cash Flows.

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Changes To Accounting For Defined Benefit Postretirement Plans: Discussion And Illustration

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v23i2.1398 ◽

2011 ◽

Vol 23 (2) ◽

Author(s):

Norman H. Godwin ◽

Arlette C. Wilson

Keyword(s):

Accounting Standards ◽

Financial Statements ◽

Securities And Exchange Commission ◽

Financial Accounting ◽

Pension Benefit ◽

Defined Benefit ◽

Financial Accounting Standards Board ◽

Font Size

Requests that the Financial Accounting Standards Board (FASB) address issues related to employers’ accounting for defined benefit postretirement plans have increased in recent years.  Those requests have been made by users of financial statements and others, including the Securities and Exchange Commission (SEC) staff and representatives of the Pension Benefit Guaranty Corporation.  Constituents are interested in improved transparency and understandability.

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Standardizing oil and gas accounting in the US in the 1970s: Insights from the perspective of regulatory capture

Accounting History ◽

10.1177/1032373211417990 ◽

2011 ◽

Vol 16 (4) ◽

pp. 403-421 ◽

Cited By ~ 13

Author(s):

Corinne Cortese

Keyword(s):

Oil And Gas ◽

Accounting Standards ◽

Securities And Exchange Commission ◽

Regulatory Process ◽

Financial Accounting ◽

Regulatory Capture ◽

Financial Accounting Standards Board ◽

Method Choice ◽

The Us ◽

Oil And Gas Companies

Attempts by the Financial Accounting Standards Board (FASB) to standardize oil and gas accounting in the 1970s has been referred to as the “most politicised accounting argument ever” ( Van Riper, 1994 , p.56). Marking the only instance in which the Securities and Exchange Commission (SEC) has declined to support the FASB’s standards, the failure of the FASB to limit accounting method choice has had lasting implications with divergent methods still practised by oil and gas companies today. This study presents a narrative of this development and specifically examines the events through the lens of regulatory capture theory to show that the industry was successful in capturing the regulatory process and securing its preferred outcome.

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SFAS 141(R): Global Convergence And Massive Changes In M&A Accounting

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v7i4.2282 ◽

2011 ◽

Vol 7 (4) ◽

Cited By ~ 1

Author(s):

Christine Andrews ◽

Jan Falmer ◽

Jeannette Riley ◽

Carrie Todd ◽

Ara Volkan

Keyword(s):

Global Convergence ◽

Accounting Standards ◽

Financial Accounting ◽

Financial Accounting Standards Board ◽

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Comment Letters

The Financial Accounting Standards Board issued SFAS 141(R) in December 2007 to replace SFAS 141. Analyzing comment letters, industry publications, and articles, we evaluate problems that existed with SFAS 141 from the perspective of users, professionals, and the FASB; evaluate 141(R) to ascertain if these weaknesses were corrected; and propose solutions to some of the problems that still exist.

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