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December 4, 2022

Accounting News Roundup: Materiality’s Many Definitions; Tesla’s New CFO; AICPA vs. IRS | 11.04.15

Definition of Materiality Depends Who You Ask [CFOJ]
Out of all the definitions listed from the SCOTUS, SEC, FASB, IASB, PCAOB, I personally like Thurgood Marshall's the best: "An omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote." There are no extraneous words.

The SEC's definition is slightly longer, the FASB's and IASB's are pretty close in the length and the PCAOB's is two paragraphs. Theoretically, you could change "vote" to "invest" or "make a decision" or whatever and you have a relevant definition. Things get slightly more complicated when you have to consider quantitative measures; e.g. is an error or misstatement material if it would change shareholders' equity by 5%? 10%? 25%? Opinions will vary.

Why foreigners ignoring this tax could be costing US billions [CNBC]
CNBC threw some numbers together and estimates that the US is "missing several billion dollars in foreign estate taxes each year."

Tesla Poaches Google Finance VP for CFO [CFOJ
Jason Wheeler succeeds Deepak Ahuja.

Tilley: CIMA focus will remain despite new global association [Accountancy Age]
The head of CIMA, Charles Tilley, says that the "evolution" of the joint venture with the AICPA "will not dilute their brands" and "would look to better use resources to promote their joint CGMA designation."

In other news:

  • Zynga's CFO quit without explanation. 
  • "The construction and interpretation of sarcasm lead to greater creativity because they activate abstract thinking." [Oregonian]
  • The AICPA can sue the IRS over tax preparer regulations. [Forbes]
  • Buzzwords. [Bloomberg]
  • A cartoonist turned the iTunes Terms of Service into a 47-page graphic novel [The Verge]

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