The American Institute of Certified Public Accountants (AICPA) has announced it support for the Global Accounting Alliance (GAA). This coalition of the world’s leading accounting bodies provide recommendations for improving financial reporting worldwide, including the recent report, "Getting to the heart of the issue – Can financial reporting be made simpler and more useful?"  
Our worldwide economies are becoming more and more interdependent. Barry Melancon, President and CEO of the AICPA states:
"As policymakers pursue a more coordinated, global approach to regulation and market support, we in the accounting profession are continuing a dialogue on how to reduce complexity in …read more

Mark to market, or fair value accounting is the process of restating assets on the balance sheet reflect their current market value. The accounting rule has gotten a lot of attention lately because of its role in the current financial crisis. The rules have been amended, but the controversy continues.
What on the surface seems like a fairly straight forward rule has many implications. At the forefront now is the fact that financial institutions have had to recognize (take a hit) for billions on (devalued) mortgage-related securities because of the rule. Most economists agree that mark to market accounting has …read more

Accounting rules have been in the news a lot lately. One in particular, the mark to market rule, has become something of a scapegoat for the current economic crisis. I thought we’d take a step back today and look at the purpose of accounting standards and their role in our free market economy.
Why Do We Need Accounting Standards and Where Do They Come From?
To ensure uniformity in financial statements, publicly traded companies must follow a set of rules known as the generally accepted accounting principles (GAAP). Basically, GAAP is designed to help investors (including bankers) compare financial apples to …read more

In August the SEC proposed allowing some large American corporations to begin using international accounting standards as early as 2009, as well as requiring adoption by all American companies by the year 2016. However, the change in financial statement reporting could come sooner – as early as 2014 for large companies.
This move by the US to international accounting standards goes a long way toward establishing a unified set of world standards, simplifying the process of comparing companies for investors and bankers.
 
Who’s First to Adopt International Accounting Standards?
To be allowed to use the international standards early, a company must …read more

With the economy in turmoil and the U.S. auto industry using words like bankrupt and restructure, doubt grows every day about whether or not companies are operating as a ‘going concern’. This accounting term simply means that the business is expected to continue into the foreseeable future.
Of course we can’t really predict the future of any company so we have regulations. The rules state the a company is not a going concern if management plans to liquidate the entity or cease operations, or has no realistic alternative but to do so. Since the future is a long time, …read more