Is materiality best defined and “operationalized’ by the accounting profession or by the legal profession? If you had to write a definition of materiality, how would you proceed? What data would you need? What would your definition be?
Do you agree that the LCM test under US GAAP is unduly complicated? If so, do you think that the proposed ASU simplifies the accounting? What would be lost, if anything, in the change?
So the FASB has postponed the effective date by which firms must adopt the new revenue recognition rule. What might this say to you about the cost of the new standard? How would you measure the cost? How would you measure the benefit of the standard?
How would you propose that sellers of gift cards, which are ultimately not redeemed, account for unwinding the liability (unearned revenue)? Do you think your proposed solution would matter to investors? Which firms would be most affected by your proposal?
The chairman of the FASB says that complexity in accounting standards can be costly to investors and companies. Of the examples provided in the article, how would you determine the cost to companies of providing the information? For instance, how do you measure the cost of distinguishing current deferred tax assets from noncurrent deferred tax assets, and, using your measure, how costly do you think this disclosure is for companies to make?
Should the Financial Accounting Foundation (the FASB’s parent organization) make the $3 million payment to the IASB? What are some of the ramifications?
Leslie Seidman is stepping down as chair of the FASB. What do you think are the attributes of her replacement that awarded him the job? Is this a job that would appeal to you? Why or why not?
Are the the information needs for private company stakeholders different from those of public companies, such that the accounting standards should be different?
The Financial Accounting Foundation (FAF) is the parent to the FASB. FAF has decided to conduct a post-implementation review of a few standards that were implemented many years ago. How do you think they decide which standards to review? How do you think they determine whether the standards need to be changed?
Both the FASB and the IASB are under pressure to prioritize and streamline accounting disclosures due to perceived disclosure overload. How would you determine which disclosures are absolutely necessary and which ones could be eliminated?
There was tension and controversy about whether the FASB should also be given the task of standard setting for private companies, in addition to public companies. Do you believe the processes and players, just put in place, will be responsive to private companies’ concerns?
Why would Morgan Stanley want the former chairman of the FASB to be on its board of directors when it already has the former chief accountant for the SEC? (To see the proxy describing current board members, paste this link into your browser and then do this word search: “Chief Accountant”: http://sec.gov/Archives/edgar/data/895421/000119312512151028/d303252ddef14a.htm#tx303252_16)
Describe the various points of view expressed on auditor rotation, private company accounting standards, international accounting standards, and integrated reporting. Who are the persons taking the various points of view, and what constituencies do they represent?
FIN 48 requires firms to accrue a liability for tax positions (such as deductions, timing of tax payments, etc.) that stand a “50/50 chance” of not being upheld on an audit. Why do firms “revile” the rule? Why did the FAF get involved in the review? How would you challenge the FAF’s conclusion that the information is useful for investors?
Why do you think firms may be inclined to “over-disclose” in their notes to the financial statements?
Should the FASB have pushed for more qualitative disclosures about going concern? What would be the downside?
What’s the point of conversion to IASB (from U.S. GAAP) if there is an escape hatch as implied by the SEC’s Chief Accountant? (FASB could decide not to apply an IASB rule that “does not improve financial reporting for U.S. investors.”)
Why is it necessary for the Japanese standard setters and the U.S. standard setters (FASB) to have meetings on convergence if each is also trying to achieve convergence with international accounting standard setters?
Why does the AICPA think private company accounting standards should be set by a board that is not under the FASB? Why does the FASB not want to relinquish control over private company standard setting?
