A HISTORY OF POOLING OF INTERESTS ACCOUNTING FOR BUSINESS COMBINATIONS IN THE UNITED STATES

This paper traces the development of pooling of interests accounting for business combinations from 1945 to 1991. The history of the pooling concept is reviewed chronologically with particular emphasis on the events of 1969–1970 that were related to the most recent pronouncement on the subject, Accounting Principles Board (APB) Opinion No. 16. Early in its life (1974), the Financial Accounting Standards Board (FASB) placed a project on its agenda to reconsider pooling of interests accounting. That project was removed from the FASB's agenda in 1981. APB Opinion No. 16 has gone essentially unchanged as it relates to the accounting for a business combination as a pooling of interests. Resolution of implementation issues has been left largely to the Securities and Exchange Commission and the accounting profession. The FASB has a project on its agenda on Consolidations and Related Matters that may impact pooling of interests accounting. There also is some pressure for the FASB to revisit accounting for business combinations.

Download Full-text

New Accounting Guidance For Business Combinations

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v1i1.2961 ◽

2011 ◽

Vol 1 (1) ◽

Author(s):

Allen W. McConnell ◽

Bill D. Cox ◽

John E. Elsea

Keyword(s):

Accounting Standards ◽

Financial Accounting ◽

Financial Accounting Standards Board ◽

Business Combinations ◽

Accounting Principles ◽

Business Combination

The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141 Business Combinations in June 2001. SFAS 141 supersedes Accounting Principles Board (APB) Opinion No. 16 Business Combinations and SFAS No. 38 Accounting for Preacquisition Contingencies of Purchased Enterprises. APB Opinion 16 created two acceptable methods of accounting for a business combination, the purchase and the pooling of interests methods. These two different methods often resulted in very different financial results for economically similar transactions.

Download Full-text

Cryptocurrencies for the Payment of Products or Services: Risks, Accounting Practices and Regulations

Accounting and Finance Research ◽

10.5430/afr.v8n4p19 ◽

2019 ◽

Vol 8 (4) ◽

pp. 19

Author(s):

David Allen ◽

James Aselta ◽

Russell Engel

Keyword(s):

Accounting Standards ◽

Securities And Exchange Commission ◽

Financial Accounting ◽

Internal Revenue Service ◽

Financial Accounting Standards Board ◽

Internal Revenue ◽

Blockchain Technology ◽

History Of ◽

Regulatory Bodies ◽

The Subject

This paper examines the risks, accounting practices and disclosures of companies who accept cryptocurrency for the payment of products or services. We provide a brief history of cryptocurrency and blockchain technology that allows the reader to deepen their understanding of the subject before moving on to a discussion of how regulatory bodies such as the Financial Accounting Standards Board (FASB), the Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS) are treating the accounting for cryptocurrency transactions.

Download Full-text

Accounting for Business Combinations (Topic 805)

World Journal of Business and Management ◽

10.5296/wjbm.v5i2.15031 ◽

2019 ◽

Vol 5 (2) ◽

pp. 1

Author(s):

Dahli Gray ◽

Ruben Torres

Keyword(s):

Accounting Standards ◽

Future Research ◽

Financial Accounting Standards Board ◽

Managerial Accounting ◽

Business Combinations ◽

Governmental Accounting ◽

Ethical Implications ◽

History Of ◽

Business Combination ◽

Contract Liability

This article discusses the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, as promulgated by the 2019 Accounting Standards Update (ASU) concerning Business Combinations. It focuses on revenue from contracts with customers. Several concerns regarding how and when to recognize an assumed liability after a business combination were raised by users and preparers of financial statements. Concerns emerged from the differing views on how a liability (that is, performance obligation) is defined within the FASB ASC Topic 606 regarding revenue from contracts with customers. Determining how and if a contract liability is recognized in a business combination from a revenue contract were the major concerns. This article reviews a brief history of business combinations and contracts with customers. It explores the issue from various accounting perspectives (such as financial and managerial accounting, tax accounting, governmental accounting issues, ethical implications, and international accounting). Potential questions for future research regarding this topic are presented. The 16 Comment Letters sent to the FASB are discussed. The results of a survey administered as part of this research are presented.

Download Full-text

Revised Accounting For Business Combinations

American Journal of Business Education (AJBE) ◽

10.19030/ajbe.v1i2.4620 ◽

2008 ◽

Vol 1 (2) ◽

pp. 13-20

Author(s):

Arlette C. Wilson ◽

Kimberly Key

Keyword(s):

Accounting Standards ◽

Financial Accounting ◽

Financial Accounting Standards Board ◽

Business Combinations ◽

Business Combination ◽

Representational Faithfulness ◽

Acquisition Method

The Financial Accounting Standards Board (FASB) has recently issued Statement of Financial Accounting Standards No. 141 (Revised 2007) Business Combinations. The object of this Statement is to improve the relevance, representational faithfulness, and comparability of reported information about a business combination and its effects. This Statement replaces FASB Statement No. 141, but retains the fundamental requirements that the acquisition method of accounting (previously called the purchase method) be used for all business combinations. Some of the changes related to the accounting for business combinations as a result of the new requirements are discussed and illustrated below.

Download Full-text

Viewing the 1996 FAF Restructuring as Policy Making without a Formal Due Process

Accounting Horizons ◽

10.2308/acch.2002.16.3.199 ◽

2002 ◽

Vol 16 (3) ◽

pp. 199-214 ◽

Cited By ~ 6

Author(s):

Paul B. W. Miller

Keyword(s):

Financial Reporting ◽

Policy Making ◽

Due Process ◽

Accounting Standards ◽

Sole Source ◽

Securities And Exchange Commission ◽

Financial Accounting ◽

Perceived Threat ◽

Financial Accounting Standards Board ◽

Public Accounting

In 1996, a major financial reporting controversy emerged, escalated, and was resolved without substantial exposure or a formal due process. Specifically, a committee of the Financial Executives Institute (FEI) sent a letter to the chair of the Financial Accounting Foundation (FAF) asserting that the Financial Accounting Standards Board (FASB) “process is broken and in need of substantive repair.” When Securities and Exchange Commission (SEC) Chair Arthur Levitt determined that neither FAF nor public accounting leaders were dealing with the FEI proposals to his satisfaction, he acted to defeat this perceived threat to FASB's independence, focusing on the composition of the FAF. In response, the FAF trustees resisted because they viewed his intervention as a threat to FASB's independence. When the trustees did not voluntarily change, Levitt proposed reconsidering Accounting Series Release No. 150, which designates FASB as the sole source of GAAP for SEC filings. Eventually, Levitt prevailed. This paper describes this intervention as a case of policy making without a formal due process and adds to the already weighty evidence that accounting standards are political.

Download Full-text

An Evaluation Of The Implementation Of Fair Value Accounting: Impact On Financial Reporting

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v9i1.934 ◽

2011 ◽

Vol 9 (1) ◽

Author(s):

Karen T. Cascini ◽

Alan DelFavero

Keyword(s):

Financial Reporting ◽

Accounting Standards ◽

Fair Value ◽

The United States ◽

Financial Accounting ◽

Financial Assets ◽

Financial Accounting Standards Board ◽

Continuous Change ◽

Fair Value Accounting ◽

The Cost

The accounting industry is in a state of continuous change.  In the United States, the historical cost principle has traditionally been the foundation of accounting.  Until recently, assets and liabilities have been required to be recorded at their acquisition prices, with the exception of designated financial assets and financial liabilities.  However, the Financial Accounting Standards Board (FASB) has now created accounting standards that are distant from the cost principle.  Statement of Financial Accounting Standards No. 157: Fair Value Measurements, issued in September 2006 (FAS157, now codified as ASC 820) and Statement of Financial Accounting Standards No. 159: The Fair Value Option for Financial Assets and Financial Liabilities, created in February 2007 (FAS159, now ASC 825-10-25), significantly increases the viability of fair value accounting. The purpose of this paper is to illustrate the benefits and pitfalls of fair value and the corresponding affects on various stakeholders.

Download Full-text

Editorial

Journal of Economic and Financial Sciences ◽

10.4102/jef.v10i2.12 ◽

2017 ◽

Vol 10 (2) ◽

pp. 191-193

Author(s):

Gideon Els

Keyword(s):

United States ◽

Credit Card ◽

Accounting Standards ◽

The United States ◽

Financial Accounting ◽

Financial Accounting Standards Board

In the second part of her research, Sophia Brink again looks at the accounting treatment of credit card rewards programmes. In May 2014 the IASB and the United States Financial Accounting Standards Board (FASB), published IFRS 15

Download Full-text

The accounting treatment of credit card rewards programmes: a South African perspective (Part 1)

Journal of Economic and Financial Sciences ◽

10.4102/jef.v10i1.8 ◽

2017 ◽

Vol 10 (1) ◽

pp. 107-124

Author(s):

Sophia Brink

Keyword(s):

South African ◽

Customer Loyalty ◽

Credit Card ◽

Accounting Standards ◽

The United States ◽

Financial Accounting ◽

International Accounting Standards ◽

Financial Accounting Standards Board ◽

African Perspective ◽

Loyalty Programme

Credit card rewards programmes are a common phenomenon in the South African market. On 1 July 2007 the International Accounting Standards Board (IASB) issued IFRIC 13 Customer Loyalty Programmes to give specific guidance to suppliers on the accounting treatment of customer loyalty programme transactions. Although credit card rewards programmes are specifically included in the scope of this Interpretation, in practice not all credit card rewards programmes currently account for award credits under the revenue deferral model (IFRIC 13). During May 2014 the IASB and the United States Financial Accounting Standards Board (FASB) published IFRS 15 Revenue from Contracts with Customers intended to replace six existing Standards and Interpretations, including IFRIC 13. Currently there is uncertainty whether or not a credit card rewards programme transaction falls within the scope of IFRS 15. Despite concerns raised the Boards decided against providing any additional guidance to credit card rewards programmes and indicated that they leave it up to management

Download Full-text

On Narrowing The Credibility GAAP: Has The Financial Accounting Standards Board (FASB) Enhanced The Credibility Of Generally Accepted Accounting Principles (GAAP)?

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v9i2.6079 ◽

2011 ◽

Vol 9 (2) ◽

pp. 76 ◽

Cited By ~ 1

Author(s):

Douglas K. Schneider ◽

Gordon S. May ◽

David R. Shaffer

Keyword(s):

Accounting Standards ◽

Psychological Research ◽

Financial Accounting ◽

Future Research ◽

Financial Accounting Standards Board ◽

Financial Reports ◽

Generally Accepted Accounting Principles ◽

Perceived Credibility ◽

Accounting Principles ◽

Social Psychological Research

The purpose of this study was to apply social-psychological research methods to address an issue of widespread concern in the accounting profession. One of the primary motives underlying the creation of the Financial Accounting Standards Board (FASB) was to increase the credibility of Generally Accepted Accounting Principles (GAAP). Our main objective was to assess any differences in the perceived credibility of FASB GAAP and pre-FASB GAAP, as indicated by three groups of FASB constituents familiar with these procedures: corporate preparers of financial statements (preparers), CPAs who audit financial reports to ensure their adherence to GAAP (auditors), and accountants who use financial reports to make lending and investment decisions (users). The results indicated that (a) the credibility of accounting principles can be assessed, (b) not all dimensions that have been touted as contributors to the credibility of accounting practices predict accountants perceptions of credibility, and (c) examples of FASB GAAP were perceived as less credible than corresponding examples of pre-FASB GAAP by each of the above three groups of FASB constituents. Some implications of these results and suggestions for future research are discussed.

Download Full-text

The FASB and Accounting for Economic Reality

Accounting and the Public Interest ◽

10.2308/api.2006.6.1.1 ◽

2006 ◽

Vol 6 (1) ◽

pp. 1-21 ◽

Cited By ~ 29

Author(s):

Thomas A. Lee

Keyword(s):

Conceptual Framework ◽

Accounting Standards ◽

Social Reality ◽

Global Strategy ◽

Financial Accounting ◽

Financial Accounting Standards Board ◽

Socially Constructed ◽

Accounting Numbers ◽

History Of ◽

Economic Reality

The proposal by the Financial Accounting Standards Board (FASB) in 2002 to produce principles-based accounting standards is an explicit commitment to use its conceptual framework to improve financial accounting. In effect, it is a proposal to assist accounting for economic reality. However, an evaluation of the proposal and related FASB communications reveals a global strategy more concerned with achieving comparability and consistency than identifying improved ways of recognizing and representing socially-constructed reality by accounting numbers. The paper examines the philosophical notions of social reality and truthful correspondence in light of principles-based accounting standards and suggests that the FASB's superficial use of its conceptual framework in this respect is consistent with a history of conceptual frameworks as means of legitimating standard setting activities. As such, the FASB proposal would be no more than a short-term palliative to the long-term ills of financial accounting world-wide. The paper recommends a better understanding of the construction and representation of social reality by all concerned with the world of financial accounting.

Download Full-text