Recently, we enjoyed a wonderful article titled “Buyers Beware: The Goodwill Games,” by Scott Thurm who discussed an interesting rubric by which to evaluate goodwill’s value: the ratio of a company’s goodwill to the total entity’s market value. Thurm seems to suggest that companies whose goodwill exceeds market capitalization may be prime candidates for future [...]
As you may recall, we previously discussed problems in government pension accounting (see “California Budget Woes and Chimerical Pension Beliefs: GASB Could Help if it Had the Will”). In this essay we turn our attention to corporate pension accounting, pension expense specifically, using Weyerhaeuser disclosures as an example.
Deferred tax assets and deferred tax liabilities remain bizarre and frequently misunderstood members of the financial statement community. Whatever they may be, it is doubtful that the former are assets, or that the latter are liabilities. Likewise, to measure income tax expense as a function of financial reporting income is peculiar because Congress and the [...]
The Financial Accounting Standards Board (FASB) is getting around to addressing the disclosure catastrophe that has befallen our beloved financial statements. Yes, in case you haven’t noticed, the financial statement notes (the report content that really matters) have disintegrated into a series of disorganized, generic, boilerplate text references that can at best be called tedious, [...]
We first voiced our concern about an obscure accounting rule that allows companies to “create” profits when purchasing other businesses in the “Curious Case of Miller Energy’s 10-K and Its Huge Bargain Purchase.” The offending tenet relates to the treatment of something called “negative goodwill” which purportedly is created when a company makes an acquisition, [...]