The predecessor of the International Accounting Standards Board (the IASB) was the International Accounting Standards Committee (IASC). IASC’s early standards typically contained several options that allowed different companies to choose freely between different accounting transactions for similar transactions. E32 Comparability of Financial Statements On 1 January 1989, IASC published exposure draft E32 Comparability of Financial… Continue reading When IASC removed many options
Tag: Goodwill
We call too many things ‘intangible assets’
The definition of an intangible asset in IAS 38 Intangible Assets is too broad, in my view. The assets it captures do not form a single natural class of assets that all have a common feature. As a result, IAS 38 may not provide the most useful information about every type of asset captured by… Continue reading We call too many things ‘intangible assets’
Why has research on ‘conservatism’ told standard setters so little?
There is a vast and burgeoning academic literature on conservatism in accounting, and a slightly less flourishing literature on the somewhat related notion of accounting prudence. When I worked in standard setting, I didn’t find that literature as helpful as I had hoped. My impression is that my colleagues and other standard setters didn’t find… Continue reading Why has research on ‘conservatism’ told standard setters so little?
Does future tense help keep goodwill alive?
When a verb refers to the future, some languages require explicit marking of that fact. A recent paper presents evidence that companies in countries using those languages are slow in reporting goodwill as impaired. The paper suggests that this is because speakers of those languages perceive the future as more distant than speakers of other… Continue reading Does future tense help keep goodwill alive?
Own credit risk
The topic of own credit risk generates perhaps more strongly held views than any other accounting topic. For example, in around 2011, the IASB was developing a discussion paper on insurance contracts. Some of us visited one of the largest insurers in the world. They knew almost nothing about the project. But they had heard… Continue reading Own credit risk
IASC’s project on discounting
The International Accounting Standards Committee (IASC) added to its work plan a project on discounting (or present value) in 1998. IASC was the predecessor of the International Accounting Standards Board (the IASB). When the IASB came into being in 2001 and took over from IASC, the IASB decided not to continue with the project. In… Continue reading IASC’s project on discounting
I can’t get excited about goodwill
Many people have strong views about whether the International Accounting Standards Board (Board) should reintroduce amortisation of goodwill. But I can’t get excited about that as a topic for standard setting now, for two reasons: I think the arguments for amortisation (with impairment) and the arguments for impairment-only are quite finely balanced. I’m not sure… Continue reading I can’t get excited about goodwill