If you were tasked with writing an accounting standard to answer the questions about digital currency, what would you do? How would you begin? What do you think your conclusion would be? Is it cash? Investment? Inventory? Intangible? Would you use fair value accounting?
Given the SEC Chair’s promotion of IFRS, why do you suppose that movement on the issue continues to drag on so slowly?
So VW may accrue another billion as a contingent liability. What is the threshold for balance sheet recognition of contingencies under US GAAP? Under IFRS? Do you believe these future costs have already been reflected into the firm’s stock price? How could you determine if they have?
Do you think you could have predicted the goodwill impairments for these German firms? What would make good predictors?
Should gains on property sales for Lenovo be part of operating income (above the line) or should they be below the line? Does it matter?
The SEC wants to eliminate duplicative disclosures found elsewhere in the financial statements. How did the disclosure system get to the point where certain disclosures are required in two different places. What are some implications of eliminating duplicate disclosures? Who benefits from the proposed change? Who might lose?
Do you think allowing multinationals to report in IFRS would weaken or strengthen financial disclosures? How would you test your hypothesis?
If you were the CFO of a US company, what factors would you consider in deciding whether to report BOTH IFRS and US GAAP financial results? Do you think many companies will exercise the option to report both, if the option is offered?
If the SEC allows non-US registrants to use IFRS, why shouldn’t US registrants be allowed to do so as well? What is the downside of allowing US registrants to file using IFRS?
Who do you think is right, the chairman of the IASB (Mr. Hoogervorst), or the vice-chairman of the IASB (Mr. Mackintosh), about whether global accounting standards are achievable and inevitable? Does it matter if there are global standards or not? What are the benefits of global standards? What are the costs?
Given the diversities and complexities around the globe (cultural, religious, political, among others), how likely is it that a single set of financial standards, used globally, will be successfully achieved?
Do you think it is a good idea for the EU to go from requiring quarterly reporting to semi-annual reporting? Why or why not? Who benefits from this change? Who is hurt by this change?
Do you agree that the “expected loss” model is better than the “incurred loss” model? Why or why not? Can using an expected loss model become a self-fulfilling prophecy and exacerbate pro-cyclicality, which many claim worsened the financial crisis?
The main argument in favor of a universal set of accounting standards is comparability across countries. A recent study documents that IFRS are not applied consistently across countries that have adopted IFRS. What does this finding suggest about this main argument for IFRS adoption?
Prof. Pachter states, “Adoption is the only way to achieve a single set of global financial reporting standards.” In other words, only outright adoption, not convergence over time, is workable. Do you agree? Why would a country not want to “outsource” standard setting to another entity not under its jurisdiction? Why might having only one standard setting body for the entire world not be a good idea?
Is it critical that the FASB and the IASB see eye to eye on the measurement of credit risk? Why or why not? Can you describe in one sentence the main difference between an expected loss and an incurred loss? What does the difference between the FASB and IASB indicate about the political nature of standard setting?
What is your reaction to the statement, “. . . countries that have adopted IFRS are usually looking for some improvement in capital markets or the greater society that can only be achieved by adopting IFRS.”
Is it necessary to converge US GAAP and IASB? Why or why not? Is it necessary for the two standard setters to have a good working relationship? Why or why not? Your best guess: where will we be in 5 years? Where we are now? Converged? Other?
Why do you think it was “necessary” for the IFRS supporters to “push back” against the SEC report on IFRS? How did the push-back address the issue of the cost of conversion?
