Views on improving the integrity of global capital markets


Bank Regulatory Capital: Brewing Storm over Basel III Removal of Financial Reporting Information Filter

It remains challenging for investors to fully anticipate the consequences of forthcoming bank regulatory requirements, especially across interrelated strands of regulation. A case in point is a Basel III requirement eliminating filters relating to financial reporting information.

Private Company Financial Reporting: FASB Marches on Without Defining Private Companies or Deciding How They Are Different

On 12 February, the Financial Accounting Standards Board’s (FASB) Private Company Council (PCC) voted to add three projects to its formal agenda to consider how accounting in three topical areas should be differentiated for private companies.

Bank Financial Reporting: “The Cause Is Hidden, but the Result Is Well Known”

Are you the trusting sort? How about when it comes to trusting banks some six years after the financial crisis? You should consider reading The Atlantic’s recent article “What’s Inside America’s Banks?” on why many in the investment world, and the general public, still don’t trust banks.

Optional Use of IFRS and Private Company Standards: Both Reduce Comparability in U.S. Financial Reporting

Last week, Hans Hoogervorst, chairman of the International Accounting Standards Board (IASB), made the case for the U.S. Securities and Exchange Commission (SEC) to allow the optional use of International Financial Reporting Standards (IFRS) by U.S. publicly listed companies.

Need for Increased Transparency of Derivatives and Hedging Activities in Financial Reports

CFA Institute recently issued a report, User Perspective of Financial Instrument Risk Disclosures Under IFRS (Volume 2), that focuses on the disclosures of derivatives and hedging activities of financial and non-financial institutions.

Unfinished Work: Accounting Guidance for Investment Properties

In October 2011 the Financial Accounting Standards Board (FASB) issued proposed guidance on how to value investment properties. But instead of providing guidance on how to measure investment properties held by any entity, the FASB created a new type of entity — the so-called “investment property entity” (IPE).

Enhancing Disclosure of Bank Risks: Investors Have Important Role to Play

The need for better risk disclosures has been evident throughout the financial crisis. From the standpoint of investors and bank counterparties, the ongoing high cost of borrowing alongside difficulties that many banks still face when accessing different funding markets reflect the opacity surrounding bank institutions’ risk profiles.

Financial Statement Disclosures: Standard Setter, Regulator, and Investor Perspectives

CFA Institute recently held a webinar, “Financial Statement Disclosures: Standard Setter, Regulator, and Investor Perspectives,” to discuss the Financial Accounting Standards Board (FASB) and European Financial Reporting Advisory Group (EFRAG) proposals for developing a disclosure framework and improving financial disclosures.

Reining in Risk: Improve the Transparency of Banking Financial Reports

Vincent Papa, PhD, CFA, examines the link between sovereign debt and bank risk; capital requirements for the banking industry; the need to improve transparency for derivatives; and other systemic risk issues relating to banks.

Continued Concern for “Going Concern” Reporting

There is little question that, in the wake of the credit crisis (think Lehman Brothers and the AIG bailout) and the MF Global debacle, advance warnings about a company’s failing financial health would be welcomed by investors. One such… READ MORE ›

Investment Property “Entities” — Seriously? Measure All Real Estate Investments at Fair Value

Mohini Singh, ACA, examines why fair value is the most relevant measurement basis for all real estate properties — not just investment properties, as proposed by FASB.

Investment Company Accounting: FASB, IASB Proposals Step in the Right Direction, but …

While CFA Institute believes that the FASB and IASB proposals for investment company accounting are a step in the right direction, digging into the details of the proposed changes uncovers some problematic issues.

Four Years Post-Crisis: Investors May Obtain More Information on Level 3 Fair Value Measurements in First Quarter 2012

In the aftermath of the financial crisis, we saw protests against the use of fair value to measure financial instruments as well as complaints regarding how fair value measurements were derived. Sandra Peters, CFA, examines how regulators are responding to concerns.

Coming Soon to an Income Statement Near You: Comprehensive Income

Did Bank of America have a profit or loss in 2011? Finding the answer requires digging into the company’s financial reports. While the net income stares you down on the face of the income statement, the loss hides behind a curtain known as “comprehensive income.” But that is about to change.

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