Article,

Discussion of “The implications of unverifiable fair-value accounting: Evidence from the political economy of goodwill accounting”

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Journal of Accounting & Economics, 45 (2/3): p282 - 288 (20080801)

Abstract

Abstract: Ramanna 2007. The implications of unverifiable fair-value accounting: evidence from the political economy of goodwill accounting, Journal of Accounting and Economics provides interesting and novel evidence on how firms use contributions from their political action committees (PACs) to members of Congress as a means of lobbying for preferred positions on the two exposure drafts that led to SFAS-141 and SFAS-142. My discussion raises some concerns about his main conclusion: that pooling firms lobbied the FASB to obtain a “fair-value”-based impairment rule to facilitate their ability to manipulate financial statements. I offer a more benign explanation and make some other observations about how this line of research could proceed in the future. Copyright 2008 Elsevier Copyright of Journal of Accounting & Economics is the property of Elsevier Science Publishing Company, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copy

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