Why FASB Should Hit Pause [AT]
Professors Baruch Lev of NYU and Shiva Rajgopal of Columbia lament about how irrelevant financial reporting has become. They blame FASB:
Financial reports lost their relevance because FASB generates increasingly complex rules on issues that largely don’t matter to most investors, such as the fair values of nontraded assets and liabilities for non-financial firms. It also insists on ignoring the value of patents, brands, IT or unique business processes. These intangible assets are now the major value creators of businesses.
The corporate investment rate in intangible assets is now twice the investment in physical assets, and yet corporate balance sheets still proudly exhibit plant, machinery and inventory.
The tricky thing about intangible assets is that they're intangible! It's hard to say, for example, what the value of Apple's brand is. Sure, it's valuable and people estimate it all the time, but we're talking about accountants and auditors here. I ask this with complete ignorance of consumer behavior, but how much comfort can an auditor really get over things like "how effectively a brand influences customer choice"? How much comfort do auditors get over Donald Trump's feelings? I don't know. And Lev and Rajgopal want this to be reported to public company analysts and investors? Think of the lawsuits! It would be so fun.
These guys also want FASB to focus on "principles-based accounting" which is code for IFRS and "hit the pause button on issuing new standards." They say "investors and executives will appreciate a fresh direction." Yes, because history has shown that people love radical change.
Accountants at PwC and EY set aside their differences to play on a giant bouncy castle next to their office buildings [City AM]
That's a real headline and the article does not disappoint:
King, the gaming firm bought out by Activision Blizzard last week, launched a spin-off of its now-infamous mobile game Candy Crush at More London on Wednesday evening, installing an enormous bouncy castle next to EY and PwC’s offices.
Named ‘Bouncingham Castle’, gaming chiefs called on singer Alesha Dixon to unveil the adults-only inflatable monolith near Tower Bridge, inspired by the new jelly-themed competitive game Candy Crush Jelly Saga.
According to the games company, the castle emits “the smell of raspberry jelly within its walls” as well as playing noises from the game when jumpers bounce on certain squares, bringing the mobile gaming app to life.
The castle stands at seven metres high and eleven metres wide, as tall as a house and the length of a double-decker bus; providing accountants with plenty of room to use the installation as a weapon.
Naturally, an "adults-only inflatable monolith" with two rival accounting firms on either side of it led directly to a confrontation:
on hearing about the bouncy castle, teams both audit firms took inspiration from another one of Activision Blizzard's infamous video games Call of Duty, and planned to use installation to launch themselves into each other in a gruelling, colourful attack.
No injuries were reported.
34 charged with tax fraud conspiracy in Battle Creek [BCE]
Now this is a conspiracy:
An investigation officials said began in 2008 showed the defendants allegedly used information obtained in part from patients and employees of the Battle Creek Veterans Affairs Medical Center and from inmates of the Michigan Department of Corrections to file 4,668 federal income tax returns claiming "false, fictitious and fraudulent refunds totaling over $22 million" between the 2007 and 2014 tax years.
The 34 conspirators range in age from 22 to 74. Impressive.
In other news:
- Indicted Ex-Chesapeake Energy CEO Aubrey McClendon Dies in Car Crash
- As usual, fake pundit beats real pundits.
- Taco Bell Rolls Out Cheetos Crunchwrap Slider for People With No Self Control
- McDonald's testing Happy Meal box that folds into VR viewer
- Who's moving to Canada?