SYNOPSIS: This paper examines instances of firms that early adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, and then rescinded or revised their early adoption of the standard because apparently their implementation was not in keeping with the “intent and spirit” of the standard. These reversals imply opportunistic use of the implementation provisions in SFAS No. 159 and, as such, provide a useful blueprint for understanding the effects of the standard, which became effective for all firms in November 2007. An analysis of the disclosures by the rescinding firms indicates the importance of informal mechanisms in helping firms interpret and implement new accounting standards, which is particularly relevant given the lesser amounts of detailed guidance provided by standard setters in principles-based compared with rules-based standards.
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Research Article| June 01 2009
Early Adoption of SFAS No. 159: Lessons from Games (Almost) Played
Online ISSN: 1558-7975
Print ISSN: 0888-7993
American Accounting Association
Accounting Horizons (2009) 23 (2): 181–199.
Elaine Henry; Early Adoption of SFAS No. 159: Lessons from Games (Almost) Played. Accounting Horizons 1 June 2009; 23 (2): 181–199. https://doi.org/10.2308/acch.2009.23.2.181
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