Tenent Healthcare Corp improves returns

According to Fierce Healthcare, Tenent Healthcare Corporation has posted better returns than previously expected for the second quarter. By holding down costs, offsetting growing bad debts, and lowering patient volumes they managed to push revenue up 4.5% and improve their free cash flow.

Number of accounting degrees is up

According to an article at The Journal of Accountancy, 66,000 Masters or Bachelors degrees were awarded to accounting graduates in the 2007-2008 school year. This is up 3.5% from the 2006-2007 academic year. Read some of the other findings in the AICPA 2009 Trends Report here.

Current financial crisis not caused by change in accounting rules

According to the AP, The Financial Crisis Advisory Group has stated that changes in accounting rules did not cause the most recent credit crisis. They did state that there are weaknesses in the application rules that may reduce the credibility in the financial reporting. To see all of their current views, please read the article here.

Tata Motors profits rise after change in accounting rules

According to Bloomberg, Tata Motors, who won Jaguar and Land Rover, saw an increase in profit after the Indian government changed accounting rules. They allowed companies to alter provsions for mark-to-market losses in foreign currency loans. This resulted in a profit rise of 58%. Read more here.

Bank of America has new Chief Accounting Officer

Yesterday, Neil Cotty was named the new Chief Accounting Officer at Bank of America. His previous position was chief financial officer at a global wealth and investment management firm. Read more about their new selection here.

Accouting for leases may change soon

An article at CFO updates us on the current progress of an accounting rule that could change the way companies account for leases. Any company that leases plants, property or equipment would be responsible for FASB predicts this new rule will be in place by 2011.

Under the current rule, companies distinguish between capital lease obligations, which appear on the balance sheet, and operating leases (or rental contracts), which do not. Based on FASB's and IASB's discussion paper on the topic, released earlier this year, the new rule will likely require companies to also capitalize assets that have traditionally fallen under the "operating lease" category, making them appear more highly leveraged.

Read the full article here.

Accounting leaders meet in New York City

This past Friday, the Global Accounting Alliance met in New York City to discuss whether or not financial accounting should be simplified.

A few of the statements from the roundtable were:

Paul Cherry, chairman of the International Accounting Standards Board’s Standards Advisory Council and former Canadian Accounting Standards Board chairman.:
“We have an antiquated conceptual framework and coming off the charts is a rigorous rethink of disclosure. Without (improving) these essential building blocks I don’t see any real prospect for meaningful simplification of the standards.”

Wayne Carnall, the chief accountant of the SEC’s Division of Corporate Finance, stated:
“[In the U.S.,] we look at everything very short term. Everything becomes incrementalized because we want an immediate solution. It seems we’re constantly making changes. If we could step back and look at issues on a longer-term basis, it would help.”

Read all thoughts here at the Journal of Accountancy.

Mark to market accounting

The Economist has a very interesting article looking some accounting rules that have different views from different sides. On one side, some believe that loans, securities, and frauds should be accounted for at market prices. On the other side, managers believe that assets should be accounted for at cost and only be written down when losses are likely to occur. The IASB has stepped in and set some new rules on this topic, and they want a system that is not going to change when the economic cycle travels up and down. Read the full article here.

San Diego may change pension accounting

In a recent article at the Union-Tribune of San Diego, they talk about the short-comings of many of the current shortcomings cities are facing when it comes to pension plans. San Diego, in particular, is thinking of changing their accounting methods in order to improve the problems they are facing because of the decrease in investments in their pension funds. It would currently increase their short term savings by millions of dollars. What do you think of plans like these?

Brazil adopts IFRS

According to Bloomberg, in the process of adopting their accounting system to IFRS, the Valor Economico of Brazil announced plans to adopt an accounting rule that would decrease the value of assets at companies that receive government consessions. It would not allow certain assets to be booked on utilities balance sheets. Read the article here.

Fare Value Accounting affected by current market situation

According to an article at BizTimes, the current state of the marketplace has damaged the effectiveness of Fair Value Accounting, otherwise known as market-to-market accounting. This rule calls for companies to reflect the current market value of their assets of the balance sheets.

P. J. Patel, CFA, senior vice president of Valuation Research Corp, who conducted the study stated, "Respondents to this survey came down hard on Fair Value Accounting. While in less volatile times, Fair Value Accounting has improved transparency, in unusual times like we've seen, FVA becomes more difficult to implement and understand.”

Read the full story here.

Pharma Financial Forum

During a time of uncertainty where the SEC continues to issue mixed signals regarding the IFRS roadmap, industry leaders are left to implement a more efficient transition to new reporting and accounting standards. Solid decisions must be made in order to determine how much time and money should be spent on new accounting measures.

The Pharma Financial Forum 2009 is a premier event designed to provide accounting, reporting, and corporate governance executives with novel strategies for operating in the rapidly evolving drug manufacturing industry, and an outline for making a smooth transition to IFRS standards. At this year’s conference, you will hear case studies from accounting and regulatory leaders who provide an unparalleled combination of current strategies that will enable you to resourcefully position your accounting operations.

Be sure to visit our website for more information and complete program details.

Don’t miss out on this opportunity to stay ahead of the game. Join us today and walk away with an action plan for 2010.

Cash flow and banks

In a new article at CFO, they look at the differences in how banks account for operating cash flow. Better accounting styles would account for a better understanding of the true financial health of the institutions. The article states that banks can't be reliably compared to eachother. Read the full article at CFO.

Germans loosen accounting rules

According to Forbes, German banks responded well to the news that the government would recend an accounting rule to help banks boost spending in the current economy. This ruling will ease up on the capital requirements governing a bank. The rule, created to be helpful in bull markets harms the banks in bear markets. Read what this ruling would do for German banks here.

Accounting firms looking at carbon and climate change accounting

The New York Times recently looked at how the Big 4 are looking to get into a new type of accounting by building carbon and climate change shops in the US. This new industry could eventually be large, rivaling the likes of the tax compliance and financial disclosure accounting sectors. In Europe, the Big Four, which consists of Deloitte Touche Tohmatsu, Ernst & Young, KPMG and Pricewaterhouse Coopers, are already well known for their carbon footprint accounting. These executives are now switching offices and moving back to the United States.

Eric Hespenheide, global managing partner of internal audit services at Deloitte and one of the leaders of its sustainability practice, said this:
"We're clearly leveraging our experience in Europe ... to build out and anticipate as best we can what impacts that will have on U.S. businesses. If the U.S. decides to adopt some reduction targets as a country, the stimulus and the impact on our U.S. economy will be magnitudes greater than what we've seen in any other individual country around the world."

Read the full article here.