The shortcomings of fair-value accounting described in SFAS 157

Analysis of the examples given by the FASB to show how fair values, defined as exit prices, should be determined in specified circumstances is revealing. Such prices require determining what hypothetical companies might pay for assets, a costly procedure at best. Even though SFAS 157 specifies exit values, several examples employ values in use and entrance values. Although transaction costs must be excluded, they often are not. Fair valuation of non-financial assets, required in certain circumstances (e.g., business combinations), is particularly difficult to apply. Furthermore, exit values of such assets as work-in-process inventories and special-purpose machines, as defined by SFAS 157, often are zero or negative. Importantly, assets and liabilities restated at exit prices yield balance sheets and income statements that are of little, if any, value to investors in ongoing firms. Further, the examples presented show that fair values could be readily manipulated. Implementation of SFAS 157, therefore, is likely to be costly to investors and independent public accountants.     

Controversies over fair value accounting： The case of SMEs

This study analyses IASB＇s stipulations on fair value usage in its standard designed for SMEs and the reactions of national standard setters, preparers and users of financial reporting in this respect. It tries to clarify fair value applications such as market value and value in use and the appropriateness of their usage for the case on hand. This research determines the inconsistencies within IASB ED IFRSfor SMEs （2007） related to the usage of fair value, underlined by the respondents＇ comment letters. The content analysis of all the above, conducted according to the type of economy and nature of respondent, along with the statistical techniques applied, indicates a partial approval of fair value usage under the following conditions： clarification of the concept, details on its usage in relation to market liquidity and the nature of the asset, additional guidance regarding the measurement methods. We advocate for the value in use, an application of the fair value based on internal valuations, which offers an adequate cost-benefit rate. The final version ofIFRSfor SMEs highlights both the preference of market information over the internal valuations and the insufficient information regarding solutions suited for non-liquid markets. It may be appropriate for the IASB, maybe in collaboration with the IVSC, to provide guidance and details regarding the implementation and disclosure of the valuation techniques applicable to this type of entities.     

财务报告质量评估:一种整合的观点

通过对美国有关评估财务报告质量的两大模式——FASB模式和SEC模式的产生背景、形成发展乃至完善成熟的全面论证,结合我国经济环境的现实特征,尝试性地构造了适合我国企业会计实务的财务报告质量评估标准体系,即一种整合FASB模式和SEC模式的观点,以期能为我国会计改革和准则建设提供理论与现实基础。     

美国每股收益会计准则评析

本文对美国每股收益会计准则（本文所称“美国每股收益会计准则”为广义上的会计准则，包括会计原则委员会意见书、财务会计准则公告等）进行了评析，并将其与国际会计准则及我国的《企业会计准则第34号——每股收益》进行了比较，以期为我国相关准则的制定提供参考。     

经济危机下会计准则发展的思考

在美国金融危机中，公允价值会计准则成了受攻击对象，甚至被认为是导致危机的主因。纵观美国会计准则史发现，会计准则从来都不只是纯技术性的规范，会计准则的制定常常和经济利益捆绑在一起，但准则调整并不能改变经济的实质。因此需要客观看待会计准则在经济危机中的作用，在危机中发现会计准则的缺陷，并构建更严密的会计概念框架以使财务信息无偏差地反映经济现实的真实表象。     

美国会计准则体系的重大变革及启示

安然事件及近年来的金融危机暴露出美国会计准则体系结构混乱、难以检索、难以应用的缺陷,因此美国对其会计准则体系作出重大变革,重整公认会计原则(GAAP)结构,正式启用<FASB会计准则汇编>,从根本上消除了美国以往由多个机构以多种形式发布多种准则文献的状况.这一举措将极大改善美国会计准则的质量,减少"准则超载"现象.降低准则复杂性,并推动美国会计准则与国际准则的趋同,最终将对各国会计准则的制定形式、格局和走向产生重大影响.     

Issue Networks, Value Structures and the Formulation of Accounting Standards: An Exercise in Theory Building

This study is an exercise in theory building. It begins from the premise that current theory with respect to the setting of accounting standards is inadequate. We advance current theory by incorporating new ideas from sociology (issues network theory, see Heclo (1978, In: King A (ed) The New American Political System. American Enterprise Institute, Washington, DC, pp 87–124) and social psychology (values structure ideas drawn from Shakun (1988, Evolutionary system design: policy making under complexity and group decision support systems. Holden-Day, Inc., Oakland, CA). In doing so, we extend previous theorizing on the accounting standard setting process (e.g., triocracy theory). Issue network theory holds that groups with intellectual, ideological and economic interests have interests in, and may exert efforts to influence, policy adoption. It is a natural outgrowth of, and important extension to, triocracy theory. We draw on Shakun’s (1988, Evolutionary system design: policy making under complexity and group decision support systems. Holden-Day, Inc., Oakland, CA) Evolutionary Systems Design theory to elucidate a theory of motivation. We argue that complex motivational structures influence the behaviors of the parties to the accounting standard setting process. As part of this effort, we categorize the guiding terminal values, instrumental values and operational goals that guide participant behaviors. We draw on previous literature to document parts of the model.     

Hicksian Income in the Conceptual Framework

In seeking to replace accounting conventions by concepts in the pursuit of principles‐based standards, the FASB/IASB joint project on the conceptual framework has grounded its approach on a well‐known definition of income by Hicks. We welcome the use of theories by accounting standard setters and practitioners, if theories are considered in their entirety. Cherry‐picking parts of a theory to serve the immediate aims of standard setters risks distortion. Misunderstanding and misinterpretation of the selected elements of a theory increase the distortion even more. We argue that the Boards have selectively picked from, misquoted, misunderstood and misapplied Hicksian concepts of income. We explore some alternative approaches to income suggested by Hicks and by other writers, and their relevance to current debates over the Boards' conceptual framework and standards. Our conclusions about how accounting concepts and conventions should be related differ from those of the Boards. Executive stock options (ESOs) provide an illustrative case study.     

International Accounting Standards Board （IASB） and Financial Accounting Standards Board （FASB） Convergence Project： Where Are They Now？

The convergence project between the International Accounting Standards Board （IASB） and the Financial Accounting Standards Board （FASB） in the United States （US） was signed on September 18, 2002 in Norwalk, Connecticut in the US. The first is responsible for issuing International Financial Reporting Standards （IFRS） nowadays, which were created 40 years ago. More than one century ago, local regulations are used in the US. The boards differ in years of experience. With the signing of the agreement, both institutions are working to reduce the divergence of accounting. Although they have made a significant progress, it is appropriate to examine whether the difference in approaches to accounting will affect the achieved agreements. It is relevant to investigate whether the years leading the standards adopted in different countries will impact the final result. The date of completion of the project has been postponed and still has not indicated the date of termination. This research is an analysis of the importance of the convergence of accounting standards at a global level. The study presents statistics on the status of the adoption of international standards by country. The study shows a summary of the expressions made by the directors of both boards about the future of the project.     

Testing and Evaluating a Conceptual Framework of Accounting

As a step toward developing a widely accepted theory to guide the standards-making process and the accounting profession, the Financial Accounting Standards Board submitted a conceptual framework to the profession for its consideration. Its purpose is to provide guidance in the choice among alternative accounting methods for an issue. Whether the conceptual framework performs its function can be objectively evaluated only when it is applied to issues and tested through a rigorous procedure. A rigorous procedure to evaluate a theory has two conceptually distinguishable but interrelated parts: (a) testing the set of sentences constituting the logical structure of the theory and its inferences by way of mathematical or logical proofs, and (b) evaluating the content of the sentences constituting the theory and its inferences by way of evidence, be it empirical, intuitive, or otherwise. The purpose of this study is to test the logical structure of the conceptual framework. The results of the study provide a demonstration that the structure of the conceptual framework is logically consistent and that inferences from the structure of the conceptual framework to alternative methods for an issue are deductively valid. The study also exemplifies an application of the structure of the conceptual framework in the selection of an alternative method for an issue. The application explicitly interrelates the structure and content of the conceptual framework.