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Overstock.com's Q1 Financial Performance Aided by GAAP Violations

There may be some issues with Overstock's accounting but I can't really tell because the writer seems confused at times about what accounting would be appropriate. The bigger issue here seems to be why are they over and underbilling? That is an internal control issue. The accounting that follows is asymetrical. Basic GAAP theory says book probably and estimable liabilities - so over bills get booked immediately. Underbills are more judgemental. Generally, contingent assets get recorded when realized - cash collected. This is what OS did. However, with these being underbills for prior period 'contracts', there may be a case to recognize an asset at the time identified - in the same period the overbills were recorded. However, I believe one would have to have access to internal documents to reach the conclusions on these underbills. This mismatch is a valid point. One I am sure the company and the auditors had to look at with great scrutiny. I suggest the writer articulate his concern to the SEC Enf. Div on the on-line tip line with support for why you think the accounting is incorrect. It may be that OS's accounting is perfectly fine. Assuming the auditors are doing their job, and they have access to internal docs that investors and the author do not, chances are good that the accounting is fine - post restatements. Auditors and companies are generally on egg shells and ultra conservative after a restatement.

Replacing Geithner

I find it astounding that the Obama team could not see before his nomination that Geithner was too wimpy. He doesn't even like speaking publicly and clearly comes off as weak. He may be a good back room guy but he's not the leader we need. Besides, he will never get respect from IRS or Tax Policy due to his tax screw up.

Dimon is a no go for sure. He will be hated and distrusted by all but his old cronies from Wall Street.

I have to say, I don't support the idea that Geithner can be propped up by someone more qualified than he is. This, quite frankly, seems to be trend in the US today - in Gov., corporations, and otherwise. We put people in charge who can't do the job and then expect someone more qualified to come in behind them for less money and less stature to do the job they are hired for and the job of their boss. Do you suppose this is part of the reason we are in the situation we are in with all these monsterous banks and insurance companies? We aren't going to get this country back on the track of prosperity until we get back to having the more qualified and capable lead those who are less qualified and capable, not vice versa.

Missing the Mark on Mark-to-Market: Congressional Quotes

Yes, I am optomistic that the whopping Herz received will actually have an impact and result in communciation of some clarity within the 3 week time frame.

The work the FASB does is hard. I recognize that many times they don't reach conclusions or provide guidance because the issues they are faced with are just too tough to figure out. The issue with FV is that the FASB is wedded to FV as a premise. If that is your premise, I am not sure what the FASB can do to make it easier or less painful. Part of the problem in the current environment is auditors views on the application of 157. They don't know how to overcome the compelling evidence of P times Q or price times quantity of active trades in the market place. I recognize the problem. It will feel that you are ignoring the best evidence if you don't use PxQ and thereby not complying with 157. We'll see what the FASB comes up with. It won't be an elimination or temporary hault on FV. That isn't in the cards.

On the flip side, the FASB is excruciatingly slow. So, lighting a fire under Herz should help. They did change their agenda - but I don't understand why they didn't clear the agenda over the next three weeks of everything besides FV. So, it looks like the message was heard but the FASB is holding onto their slow as it goes methodology. From this, I suspect the FASB will come out with some softball communication that will leave the auditors and the market place generally as confused as they are now. This may be one of those issues that we just can't figure out but I don't think it is. I think the problem is that no matter what the FASB comes up with, many entities are looking at OTTI or other FV adjustments that probably should have already been taken. How do you say, everyone is exposed? The banks, the auditors, bank regulators, and our friends at the SEC.

It will be an interesting few weeks for accounting field.

Mark-to-Market: The Bogeyman of the 1930s Is Back

I am so tired of non-accounting experts espousing views on FV. Please, buddy, 157 did not change when and where FV is applied. So, the premise of your article is completely false. We have been applying FV for decades and been doing mark to model for over a decade that I know of. This is nothing new. And, by the way, most community banks, the loudest compaliners about 157 and FV don't have many assets to which FV applies. Loans are carried at historical cost with an allowance for loan losses determined on a probably and estimable (FAS 5) basis. This is not FV. The real problem here is the banks don't want to admit to themsleve or their regulators that they have some loans that need reserves and that they have used bad models in the past for FV assets. As well, the regulators, like the OCC are in bed with the entities they regulate. They have been in these banks and seen the accounting and done nothing. Now they are in bed with the banks who made bad decisions, followed by bad or at least slow accounting.

As to FDR's actions on FV. One expert. Lynne Turner, former Chief Accountant of the Securities and Exchange Commission, testified before Congress this past week that he beleive the action by FDR to stop FV accounting actually extended the depression. Again, your view of the facts is contrary to experts in the field.

Those who are lay people on this site - please, don't beleive everything you hear. You either need to do your own analysis if you are able or talk to and listen to REAL experts.