to know. Would multiperiod disclosure help you as an investor? “U.S. GAAP allows firms to recognize some pension gains and losses in other comprehensive income and to amortize these costs into net income over time. However, firms can choose an alternative policy of recognizing these amounts in net income in the year in which they are incurred resulting in financial statements that are not comparable between firms that use the smoothing and fair-value approaches.” (Accounting, Organizations and Society) This is taken directly from the article, Reporting accounting changes and their multi-period effects . I did read most of the article, though I do not get to finish it. It was definitely lengthy. I somewhat got the feeling that it was saying that basically, they can just not report things, even after a few years, if they simply forgot (of course as long as it follows fair-value)? I know I’m being rather blunt, but is that the point behind it? After reading the article Reporting Accounting Changes and Their Multi-period Effects , two main conclusions are drawn. Firstly, a disclosure that reconciles income under the old and new accounting method is somewhat more effective than is a simple non-quantitative disclosure of the accounting change. Secondly, accounting changes have multi-period effects on investor
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- Fall '15