Phase I: Foundation

Session Description

Current Issues in Financial Reporting

This session covers two accounting issues that have had a large impact on financial statements during the recent financial crisis. Professor Bushee discusses how the reporting of fair values of financial instruments and the accounting for derivatives and hedging activities affect a company’s reported earnings and financial position. The session also focuses on the choices and estimates that management must make to record these items under current rules. Professor Bushee also discusses the changes to these rules currently proposed by regulators.

After completing this session, you will be able to:

 

• Understand the basic principles of how accounting for fair values and derivatives affects financial statements
• Identify where management has discretion in accounting for these items, and how this discretion can be used to both improve and distort financial statements
• Read financial statement disclosures of these items to identify key areas that warrant further investigation

 

Instructor

Brian J. Bushee, Associate Professor of Accounting, University of Pennsylvania