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Friday Footnotes: Marvel and the IRS; Work Less, Accomplish More; The Guy Who Flies for Free | 07.24.15

Posted on by Caleb Newquist

Have a great weekend, capital market servants. Hit the button at the top of the page to send us tips or email us directly. Don't forget to follow us on Facebook, Twitter and Pinterest. Use Open Items to ask questions, blog on presidential candidate tax policy positions or workshop chapter one of your financial thriller.

Marvel Superhero Debt Squashed by IRS [AT]

Australian fund warned investors of suspected Diageo inventory irregularities in March [MW]

Square Is Said to Have Filed for Initial Public Offering [NYT]

How successful people work less—and get more done [Quartz]

Up in the Air: Meet the Man Who Flies Around the World for Free [RS]

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Accountant Claims He Was Fired After Notifying Employer About His Wife’s Cancer

After Carl Sorabella’s wife Kathy was diagnosed with stage 4 incurable lung cancer, he notified his boss at Haynes Management that he would need to work a modified schedule to care for her. One week later, his boss informed him that his services were no longer needed.

Sorabella said he and his wife of 23 years, Kathy, learned she had stage 4 incurable cancer in late April. He said he asked his employer, Haynes Management, a real estate company in Wellesley Hills, Mass., that week for a more flexible work schedule to deal with his wife’s care.

“When I told my boss, she said ‘We were thinking about laying you off.’ I thought, ‘You can’t do that,'” Sorabella told WCVB.

Oh, but they did do that, Sorabella claims, even after he offered to work nights and weekends.

“Ultimately she said don’t worry about it and come in on Monday, and when I came in on Monday I got a letter that I would be laid off,” he said. Sorabella said the letter stated he was being laid off due to “workforce modifications.” But one week after he was fired, he says he saw a listing for his job on the company website.

Because Haynes is a small company (less than 50 employees), it is protected in such situations under the Family and Medical Leave Act. The rationale being that small businesses cannot afford to let an employee take extended leave to care for a sick relative or loved one like a large company can. Legal or not, it’s probably safe to assume that Haynes isn’t much for Employer of Choice initiatives.

Man Says He Was Fired After Telling Employer His Wife Has Cancer [ABC]

Five Questions with Accounting Professor David Albrecht

You might know him as Professor Albrecht (at least I still call him that) or you may read The Summa and have no idea who the guy is.

JDA recently forced him to answer some questions to get to the man behind the adamantly anti-IFRS curtain we love so much and discovered he’s proud to be a dissenting voice in the argument over global accounting standards convergence and then some.

First of all, Prof Albrecht is way more old school than just about anyone. He was “blogging” on listservs before there was a such thing as a blog and Caleb and I were still playing 8-bit Super Mario Bros.


Alright, maybe we’d advanced to AOL by the time Professor Albrecht was set loose among hundreds of accounting professors from around the world, the point is he’s been around. The Summa is only about a year and a half old but if you’ve ever read an accounting blog, chances are you’ve seen his work.

Secondly, he’s got opinions and lots of them. Better yet, he enjoys being a teacher; spreading the knowledge both to his own students and the “students” around the world who read The Summa regularly. That means he’d be happy to teach you why he feels the way he does but won’t hold it against you if you feel differently. That’s an admirable quality, and only part of what makes him one of my favorite accounting bloggers.

He also takes interrogation well.

Why do you blog?
I believe that writing something down helps you put your thoughts in order. Writing actually helps me figure out what I think about something. I want to make a difference. Blogging about IFRS is a way of drawing attention to the “other” side of the issue, the one you don’t hear from the large accounting firms or the SEC or the IASB or the EU.

Why should you accountants read your blog?
To find out an accounting professor take on accounting/business/finance issues. I’ve been on an e-mail listserv with hundreds of accounting professors from around the world for 14 years in the thick of many discussions. I take what I learn from these discussions and bring them to The Summa.

If someone had to read just one post of yours which one would it be?
I’ve written dozens of posts on IFRS, and you want just one? Dave Albrecht–IFRS Critic

A good accountant is…
Someone who can tell left from right.

Best Accounting firm program we’ve never heard of…
The Concordia College (Moorhead, MN) accounting major.

If the Federal Government Were a Business, It Would Be WorldCom

Deroy Murdock seems to feel that the government should revisit its accounting practices since it appears government accounting is little more than legal fraud. Obviously he has absolutely no idea how accounting really works or he’d call the entire thing fraudulent (I mean, let’s be real, it is and everyone knows it), so let’s humor his opinion for a moment and consider government accounting.

Rep. John Shimkus (R., Ill.) grilled Health and Human Services secretary Kathleen Sebelius about this before the House Energy and Commerce Subcommittee on Health. He wondered how, in essence, the Obama administration could move $500 billion from its left pocket (Medicare) to its far-left pocket (Obamacare) and somehow finance $1 trillion worth of Medicare and Obamacare.

“Your law cuts $500 billion in Medicare,” Shimkus reminded Sebelius at a March 3 hearing. “Then you’re also using the same $500 billion to say you’re funding health-care [reform]. Your own actuary says you can’t do both.”

“So,” the eight-term congressman continued, “are you using it [the $500 billion] to save Medicare, or are you using it to fund health-care reform? Which one?”

Secretary Sebelius confessed: “Both.”

“So, you’re double-counting,” Shimkus replied.

“The same dollar can’t be used twice,” observed Health Subcommittee chairman Rep. Joe Pitts (R., Pa.). “This is the largest of the many budget gimmicks Democrats used to claim Obamacare would reduce the deficit.”

As any college business major knows, such double counting would earn a big, fat F on an accounting final. Far worse, this is illegal.

Obviously Joe Pitts is not at all familiar with how accounting works. The funny part, as Murdock points out, is that the SEC does not consider non-GAAP financial statements to be anything but misleading and inaccurate. It’s a good thing the federal government won’t be trying to file an IPO any time soon.

Peep Title 17, Part 210 of the Code of Federal Regulations:

Financial statements filed with the Commission which are not prepared in accordance with generally accepted accounting principles will be presumed to be misleading or inaccurate.

Question: is there a particular reason “generally accepted accounting principles” is not capitalized? Because GAAP and gaap are two different things, one of which is a set of rules (not principles, no matter what James Kroeker may believe) while the other is basically a bunch of bullshit that we call “accounting” and agree is OK. Sort of like Don’t Ask Don’t Tell for financial statements.