If you don't remember fashions from the 1970s and 1980s, surely you've seen pictures: Polyester was the fabric of choice; guys wore Madras coats with wide lapels, had droopy moustaches and hair over their ears, and sported white shoes and matching belts, while women favored straight hair, slinky dresses and high-heeled boots.You're probably asking, "Whoa! What brought that to mind?"

You can blame last summer's unsolicited letter to the Financial Accounting Standards Board from Financial Executives International's Committee on Corporate Reporting and the Institute of Management Accountant's Financial Reporting Committee (available online at www.fasb.org).

The topic is business combinations, but the thoughts are so dated that the fashion images jumped into our minds.

What do we mean?

We both worked at FASB in those days, fending off sword thrusts from the preparer constituency as the board was trying to bring about progress. Admittedly, the swords weren't very sharp, and most were kind of bent, but so dang many of them came from so many different directions that the board members finally broke ranks and repented of their reform-minded ways.

The tone of the comments back then was transparently predictable: (a) only preparers know what's best; (b) board members produce ivory tower solutions that are no earthly good; (c) the only worthwhile measurement system is historical cost; (d) volatility isn't real; (e) statement users are easily confused and overloaded; and (f) every new standard imposes unfair costs on preparers in excess of its benefits.

The most amusing part, other than the preparers' smug confidence in their flawed arguments, was their flip-flops back and forth between accusations that FASB was too theoretical and laments that it wasn't theoretical enough.

The same sort of clatter is heard in last summer's joint letter from FEI and the IMA, which is ostensibly about business combinations but eventually sweeps in everything else.

We imagine the senders felt better for the catharsis, and that's OK. However, they may not understand that they're offering nothing but rationalizations for principles that serve their long-standing propensity to produce good-looking financial statements. They want generally accepted accounting principles to remain as is, despite the resulting half-truths and untruths, and back their demands with vague claims about comments from a few favored analysts.

What cracked us up most was a disingenuous demand that FASB hold up its new consolidation standards until it revises the Conceptual Framework. Surely they know this project will drag on for years, so they're obviously hoping the board will accede and not publish any new standards that restrict their actions.

The irony is that the two committees (which we hope do not represent the full membership) have not anticipated what would happen if FASB really did polish up its framework and then implemented it with new standards.

Ironically, the preparers' request is music to our ears. In demanding more conceptualization, they're essentially telling FASB to make GAAP more useful by eliminating outdated political compromises. They need to be careful what they ask for, because they could get reforms like these:

* Reporting inventory at market value, not some cockamamie LIFO number or another allocated cost.

* Marking all investments to market and flowing all holding gains and losses through earnings, whether realized or not.

* Depreciating assets only if they actually go down in value, and appreciating them if they, well, appreciate.

* Dealing with business combinations by restating both entities' assets and liabilities to market.

* Capitalizing all leases - period.

* Reporting all liabilities at market value without smooth predetermined allocations of interest expense.

* Recognizing stock options and other derivative liabilities on the balance sheet as demand obligations and continuously marking them to market, with value changes flowing through earnings.

* Dividing convertible bonds into their debt and derivative liability components, and marking them both to market.

* Taking all unrealized gains and losses off the balance sheet, including those from currency translation.

* Reporting gross pension assets and liabilities on the balance sheet at market, and running their changes through the income statement.

* Basing cash flow statements on the direct method - period.

The list of conceptually sound changes could go on and on, but we're confident that these committees would oppose any and all of them.

In trying to defer change, the preparers are really resisting it, a fact that makes us think they have forgotten (or are neglecting) the lessons of Enron, WorldCom and the Sarbanes-Oxley Act. It's like they see FASB as a nuisance, instead of as a body that is both willing and empowered to help them gain better access to capital through improved reporting. Perhaps they've also not grasped that the board is aligned with the International Accounting Standards Board, and now functions in a different political setting, in which their traditional threats are ineffective.

In contrast, their predecessors did dominate the process in the 1980s and into the 1990s, when FASB members hunkered down and cringed without refuting occasionally silly arguments. However, that day is gone, if only because the Sarbanes-Oxley Act has taken the purse strings out of the preparers' hands.

While their present plaint sounds familiar, it's more like whining because it is firmly rooted in the flawed idea that stock prices reflect spurious financial statement numbers, instead of real facts that analysts have to dig up on their own.

Contrary to the idea that stock values reflect today's GAAP earnings, depressed stock values and price volatility are the natural consequence of the fact that the markets (a) don't have ready access to primary sources of useful information; (b) have to spend real money to gather information from secondary and tertiary sources; (c) face higher uncertainty because their sources aren't as informed as management; and (d) don't trust managers who don't tell the truth in the financial statements. Of course, long, complaining public letters to FASB don't boost the markets' confidence in the preparer community, either.

While we're sure that today's FEI and IMA committee members are not wearing polyester, white shoes or high-heeled boots, we are disappointed that this current generation is seemingly as transparent and predictable as their predecessors. We had hoped they would grasp the value of complete information and the rewards that flow to those who tell the truth, the whole truth, and nothing but the truth.

We also hoped for their cooperation with standard-setters, not confrontation with the same disingenuous arguments.

Alas, not yet.

Paul B. W. Miller is a professor at the University of Colorado at Colorado Springs and Paul R. Bahnson is a professor at Boise State University. The authors' views are not necessarily those of their institutions. Reach them at paulandpaul@qfr.biz.

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