Market to Market Accounting: 'True North' in Financial Reporting (Routledge New Works in Accounting History)

This Volume, edited by Peter W. Wolnizer, Professor of Accounting at the University of Sydney, makes available the collected writings of Walter P. Scheutze, a senior accounting practitioner. The articles, speeches and letters collected here probe the most fundamental problems of corporate financial reporting, cogently arguing the case for accounting reform and proposing well-informed solutions to these problems. Book Cover......Page 1 Half-Title......Page 2 Title......Page 4 Copyright......Page 5 Dedication......Page 6 Contents......Page 7 Notes on author and editor......Page 10 Foreword......Page 12 Letter from Fred Talton......Page 14 Acknowledgments......Page 15 1 Walter P.Schuetze......Page 17 A call for accounting and auditing reform......Page 20 “True north” in financial accounting and reporting......Page 22 Mark-to-market accounting: historical and contemporary perspectives......Page 26 The cost of implementing mark-to-market accounting......Page 30 Who should mandate mark-to-market accounting?......Page 31 A concluding comment......Page 32 Bibliography......Page 33 2 Autobiography......Page 36 Addendum......Page 45 Part I Accounting for assets and liabilities......Page 48 The articles......Page 49 The speeches and addresses......Page 52 The letters......Page 57 4 Keep it simple......Page 62 Notes......Page 67 5 What is an asset?......Page 68 6 What are assets and liabilities?......Page 75 References......Page 100 7 New chief accountant’s wish list......Page 101 8 Relevance and credibility in financial accounting and reporting......Page 106 9 Why are we all here anyway?......Page 115 10 Accounting for restructurings......Page 119 11 Enforcement issues, and is the cost of purchased goodwill an asset?......Page 126 12 Cookie jar reserves......Page 131 13 Financial instruments......Page 136 Financial instruments......Page 138 14 Accounting for transfers of receivables (by Tom, Dick, and Harry)......Page 140 Notes......Page 146 15 Discount rate re cash outflows for nuclear decommissioning and environmental remediation......Page 148 16 Discount rate for pension liabilities......Page 151 17 Exposure Draft E55: Impairment of Assets......Page 153 18 Exposure Draft E59: Provisions, Contingent Liabilities, and Contingent Assets......Page 155 19 Exposure Drafts E60: Intangible Assets, and E61: Business Combinations......Page 158 20 Business combinations and intangible assets......Page 163 21 Accounting for the impairment or disposal of long-lived assets and for obligations associated with disposal activities......Page 170 22 Business combinations and intangible assets......Page 173 23 The FASB and accounting for goodwill......Page 177 24 Accounting for financial instruments with characteristics of liabilities, equity, or both......Page 181 25 Accounting for stock options issued to employees......Page 184 26 Proposed interpretation: guarantor’s accounting and disclosure requirements for guarantees, including indirect guarantees of indebtedness of others .........Page 190 27 Your proposed interpretation......Page 191 Part II The implications of accounting practices for auditing......Page 194 28 Schuetze on the implications of accounting practices for auditing......Page 195 The articles......Page 196 The speeches and addresses......Page 202 Impairment and the winds of change......Page 205 Little clarity in the literature......Page 206 Proposals and projects......Page 207 Roadblocks to recognition and measurement criteria......Page 208 An interim solution......Page 209 A practical alternative......Page 210 A field test for disclosure......Page 211 30 The liability crisis in the USA and its impact on accounting......Page 212 31 Reporting by independent auditors on internal controls......Page 218 Is there a cost benefit?......Page 219 Will it prevent fraud?......Page 220 The problem of ambiguous accounting principles......Page 221 Not a solution......Page 223 32 A mountain or a molehill?......Page 225 33 Comments on certain aspects of the special report by the AICPA’s Public Oversight Board of 5 March 1993......Page 234 Notes......Page 240 34 Enforcement issues......Page 242 Postscript......Page 248 Part III Accounting standard setting and regulation......Page 250 35 Schuetze on accounting standard setting and regulation......Page 251 The speeches and addresses......Page 252 The letter......Page 261 36 The setting of international accounting standards......Page 263 37 What is the future of mutual recognition of financial statements, and is comparability really ncessary?......Page 267 38 A note about private-sector standard setting......Page 272 39 Take me out to the ball game......Page 276 40 Financial accounting and reporting in our worldwide economy......Page 282 Disclosures about derivatives......Page 290 Accounting for derivatives......Page 292 Internal audit outsourcing......Page 293 42 A review of the FASB’s accomplishments since its inception in 1973......Page 295 43 Current developments at the SEC......Page 300 Postscript......Page 306 44 A memo to national and international accounting and auditing standard setters and securities regulators (a Christmas pony) .........Page 307 Notes......Page 317 45 Hearing......Page 319 46 Watching a game of three-card monte on Times Square......Page 326 Notes......Page 334 47 IASC due process......Page 336 Index......Page 340 This title is a collection of articles, speeches and letters by Walter Schuetze, accounting practitioners. In the wake of the largest surprise corporate failures and retrospective financial restatements in corporate history, Walter Schuetze and Peter Wolnizer (as editor) turn their attention to what they call the syndrome of "Enronitis". They contend that the unheralded collapse of companies such as Enron and WorldCom in the USA, and HIH Insurance in Australia, shows the failure of conventional accounting and auditing practices to provide high quality financial information for investors as intended by law. It is little wonder, therefore, that public confidence in financial reporting, auditing and corporate regulation is at an all-time low The collected writings of Walter P. Scheutze here probe the most fundamental problems of corporate financial reporting, argue the case for accounting reform and propose well-informed solutions to these problems.