Response to the FASB Invitation to Comment Identifiable Intangible Assets and Subsequent Accounting for Goodwill

2021 ◽  
Author(s):  
Shana Clor-Proell ◽  
Nerissa Brown ◽  
Stephen Stubben ◽  
Brian White ◽  
Elizabeth Blankespoor ◽  
...  
Keyword(s):  
Financial Reporting ◽  
Intangible Assets ◽  
Accounting Standards ◽  
Standard Setting ◽  
Financial Accounting ◽  
Future Research ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
Business Combination ◽  
Accounting Standard Setting

In October 2019, the Financial Reporting Policy Committee of the Financial Accounting and Reporting Section of the American Accounting Association submitted a comment letter to the Financial Accounting Standards Board regarding the accounting for certain identifiable intangible assets acquired in a business combination and subsequent accounting for goodwill. This paper summarizes the content of the comment letter and discusses opportunities for future research on intangible assets that may inform accounting standard-setting decisions.

Accounting Standard-Setting Institutions and the Governance of Incomplete Contracts

1994 ◽  
Vol 9 (3) ◽  
pp. 579-605
Author(s):  
Ronald King ◽  
Gregory Waymire
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Incomplete Contracts ◽  
Standard Setting ◽  
Financial Accounting ◽  
Economic Conditions ◽  
Financial Accounting Standards Board ◽  
American Institute ◽  
Accounting Standard ◽  
Accounting Standard Setting

“A constant problem of the accounting profession lies in the development of procedures to keep pace with changing economic conditions.” Charles Couchman, President, American Institute of Accountants, 1932.1 “New and extremely difficult problems are constantly arising in the wake of innovative business techniques.” The Wheat Committee, 1972.2 “The Board recognizes that financial reporting must adapt to a world in which change is a continuing, even accelerating process.” Dennis Beresford, Chairman, Financial Accounting Standards Board, 1991.3

The Accounting Standard-Setting Due Process, Corporate Consensus, and FASB Responsiveness: Employers' Accounting for Pensions

1995 ◽  
Vol 10 (3) ◽  
pp. 555-564 ◽  
Author(s):  
Georgia R. Saemann
Keyword(s):  
Conceptual Framework ◽  
Due Process ◽  
Accounting Standards ◽  
Standard Setting ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
Accounting Standard Setting

The Financial Accounting Standards Board (FASB) uses a due process to ascertain the views of its constituents and to build consensus while setting standards based on a sound conceptual framework. This study examines the responsiveness of the FASB and its success in building consensus among corporations in the due process on Employers' Accounting for Pensions. The findings indicate that the FASB is influenced by the number of opposing comments filed by its corporate constituents. Further, there is evidence that consensus was built throughout the due process for the highly controversial standard.

Articulating accounting principles

2016 ◽  
Vol 17 (2) ◽  
pp. 118-135 ◽  
Author(s):  
Brian A. Rutherford
Keyword(s):  
Financial Reporting ◽  
Standard Setting ◽  
Financial Accounting ◽  
Accounting Standard ◽  
Content Type ◽  
Accounting Research ◽  
Accounting Principles ◽  
Accounting Theory ◽  
Social Scientific ◽  
Accounting Standard Setting

Purpose – The purpose of this paper is to provide a soundly based epistemological underpinning for the kind of theorisation in which many classical financial accounting researchers engaged and thus to support a renewal of this programme. Design/methodology/approach – The paper draws on pragmatist philosophy and, in particular, on Jules Coleman’s theory of “explanation by embodiment”. The applicability of this theory to the world of financial reporting is discussed. Various theorists and schools within classical accounting theory are examined from the perspective of Coleman’s ideas, focusing particularly on A.C. Littleton’s Structure of Accounting Theory. Findings – The paper finds that classical accounting research works such as Structure of Accounting Theory can be interpreted as the search for Colemanian explanation by embodiment and that this provides them with a soundly based pragmatist underpinning for their theorisation. Research limitations/implications – This paper supports the resumption by academics, qua academics, of work to contribute to accounting standard-setting by offering argumentation that addresses accounting principles and methods directly, rather than only via the social scientific investigation of behaviour in the accounting arena. Practical implications – Such a resumption would contribute positively to future standard-setting. Originality/value – This paper contributes to the defence of classical financial accounting research from the charge of lacking theoretical rigour.

Impairment reversals: unbiased reporting or earnings management

2018 ◽  
Vol 26 (2) ◽  
pp. 245-271 ◽  
Author(s):  
Tongyu Cao ◽  
Hasnah Shaari ◽  
Ray Donnelly
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Reporting Standard ◽  
Accounting Standard ◽  
Content Type ◽  
Study Support ◽  
A Company

Purpose This paper aims to provide evidence that will inform the convergence debate regarding accounting standards. The authors assess the ability of impairment reversals allowed under International Accounting Standard 36 but disallowed by the Financial Accounting Standards Board to provide useful information about a company. Design/methodology/approach The authors use a sample of 182 Malaysian firms that reversed impairment charges and a matched sample of firms which chose not to reverse their impairments. Further analysis examines if reversing an impairment charge is associated with motivations for and evidence of earnings management. Findings The authors find no evidence that the reversal of an impairment charge marks a company out as managing contemporaneous earnings. However, they document evidence that firms with high levels of abnormal accruals and weak corporate governance avoid earnings decline by reversing previously recognized impairments. In addition, companies that have engaged in big baths as evidenced by high accumulated impairment balances and prior changes in top management, use impairment reversals to avoid earnings declines. Research limitations/implications The results of this study support both the informative and opportunistic hypotheses of impairment reversal reporting using Financial Reporting Standard 136. Practical implications The results also demonstrate how companies that use impairment reversals opportunistically can be identified. Originality/value The results support IASB’s approach to the reversal of impairments. They also provide novel evidence as to how companies exploit a cookie-jar reserve created by a prior big bath opportunistically.

scholarly journals FASB's Not-for-Profit Financial Reporting Project: Analysis of Letters to ASU 2016-14 Exposure Draft

2020 ◽  
Vol 9 (1) ◽  
pp. 45-75
Author(s):  
Donald R. Deis ◽  
Arpita Shroff
Keyword(s):  
Financial Reporting ◽  
Phase 1 ◽  
Accounting Standards ◽  
Data Availability ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
The Public ◽  
For Profit ◽  
Not For Profit

ABSTRACT In 2015, the Financial Accounting Standards Board (FASB) issued an Exposure Draft (ED) as part of its first significant project in over 20 years on financial reporting by Not-for-Profit organizations (NFP). In this study, we categorize the 264 letters received on the ED by the type of respondent and analyze the responses using ANOVA, multiple comparisons tests, and multidimensional scaling. Ultimately, as Phase 1 of its NFP project, FASB issued accounting standards update (ASU) 2016-14 containing proposed changes supported by a majority of the respondents to the ED. The Board deferred recommended changes with less support from respondents to Phase 2 of the project. Although constituents often accuse accounting standard setters of standards-overload and for being unresponsive to their comments (Herz 2003), our findings indicate otherwise. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G00; L31; M40.

Standard-Setting Issues and Academic Research Related to the Accounting for Financial Asset Transfers

2007 ◽  
Vol 21 (1) ◽  
pp. 59-80 ◽  
Author(s):  
Katherine Schipper ◽  
Teri Lombardi Yohn
Keyword(s):  
Cross Section ◽  
Financial Reporting ◽  
Academic Research ◽  
Balance Sheet ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Future Research ◽  
Financial Asset ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board

A large number and cross-section of firms undertake financial asset transfers. The Financial Accounting Standards Board and the International Accounting Standards Board have been grappling with the appropriate accounting for financial asset transfers, especially with respect to derecognition—that is, when the assets should be removed from the transferor's balance sheet. This paper discusses the financial reporting issues surrounding financial asset transfers and summarizes the related academic research. It also discusses potentially useful future research that could provide insights for standard-setters and suggests some impediments to that research.

The Determinants and Consequences of Big 4 Lobbying Positions on Proposed Financial Accounting Standards

2021 ◽  
Author(s):  
Brian R. Monsen
Keyword(s):  
Accounting Standards ◽  
Standard Setting ◽  
Financial Accounting ◽  
Financial Statement ◽  
Accounting Standard ◽  
Accounting Firms ◽  
Big 4 ◽  
Textual Features ◽  
Comment Letters ◽  
Accounting Standard Setting

Despite the considerable participation of Big 4 accounting firms in accounting standard setting, there is no systematic evidence on what factors shape Big 4 support or opposition toward proposed accounting standards or whether their lobbying positions materially influence standards. Using textual features of Big 4 comment letters on FASB proposals, I find that Big 4 firms' lobbying positions reflect profit motives through support for standards that will generate more fees or are supported by their clients. Big 4 lobbying support is concentrated in proposals exhibiting both characteristics, with some evidence suggesting client agreement dominates fee-generating incentives. Big 4 lobbying positions are significantly associated with standard setting outcomes, both in isolation and relative to other FASB constituents, including financial statement users. Although I primarily focus on Big 4 accounting firms, results indicate the tone of comment letters submitted by users is unassociated with the standard setting outcomes measured in this study.

Regulatory Capture in the Globalisation of Accounting Standards

10.1068/a3790 ◽  
2005 ◽  
Vol 37 (11) ◽  
pp. 1975-1993 ◽  
Author(s):  
Jayne M Godfrey ◽  
Ian A Langfield-Smith
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Standard Setting ◽  
The United States ◽  
Business Community ◽  
Front Page ◽  
Regulatory Capture ◽  
The European Union ◽  
Accounting Standard ◽  
Accounting Standard Setting

The Australian Financial Reporting Council recently shocked the world business community by unexpectedly announcing a change in the nation's approach to global-accounting-standards development. The change involved switching from ensuring consistency of Australian accounting standards with International Financial Reporting Standards (IFRSs) developed by the International Accounting Standards Board to outright adoption of IFRSs by 2005. At the time of the announcement, Australia had the most developed international harmonisation programme of any country with a well-developed financial reporting system. Events surrounding the change demonstrate how political the accounting standard-setting process can be as it continues to receive front-page media attention, and as it provides a platform in parliamentary and electoral debate. In the meantime, the US role in the global accounting standard-setting arena has moved through phases of indifference to potential active dominance, and European influences have waxed and waned. We examine whether swings in political and regulatory influences that occur when globalisation becomes a national and international goal are explained by regulatory capture theory. We also address the extent to which a subset of a single nation's regulatory system plays a key role in a series of larger national and international games. Drawing upon experiences in Australia, the United States, and the European Union, we identify political influences on initiatives to reform accounting-standard-setting environments, policies, and processes.

scholarly journals Revising the Conceptual Framework of the International Standards: IASB Proposals Met with Support and Skepticism

2016 ◽  
Vol 2 (1) ◽  
pp. 1 ◽  
Author(s):  
Christopher W. Hoffman
Keyword(s):  
Conceptual Framework ◽  
Financial Reporting ◽  
Accounting Standards ◽  
International Standards ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
Other Comprehensive Income ◽  
The U.S

This article analyzes the current financial reporting issue regarding the updates proposed by the International Accounting Standards Board (IASB) to the Conceptual Framework for Financial Reporting. Since accounting standard-setters have embraced the notion of concepts as a guide and foundation to developing accounting standards, the IASB has concluded that there should be more importance place on developing a solid framework. Based on current literature and the fact that the Financial Accounting Standards Board (FASB) in the U.S. has a solid framework in place, the IASB has designed proposed updates to their framework and requested comments from the general public regarding those updates. This article evaluates the comments made by 72 respondents and tabulates the responses based on agree, disagree, or no comment. These results concluded that 66% of the responses were positive toward the updates, but 29% were negative. The disagreement was focused around four main topics: (1) prudence; (2) statement of profit or loss; (3) statement of other comprehensive income; and (4) rebuttable presumption for recycling. The IASB hopes to assimilate, deliberate, and disseminate the suggestions, comments, and the updates in 2016.

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