• Clay Tokens – UAFRS vs AR Monthly Highlights | Interest Expense – November 30, 2022

    Last issue, we discussed our financial subsidiary adjustment This adjustment helps rectify the incongruence in balance sheet accounting between operating companies and their bank like
    financial subsidiaries

    For a bank, its assets are akin to a normal operating company’s liabilities and vice versa This is because traditional loans (which represent liabilities to a retail company, as an example) are actually the bread and butter of how banks conduct business and make profits

  • Clay Tokens – UAFRS vs AR Monthly Highlights | September 30, 2022

    Mitsubishi Group is a classic Japanese conglomerate.

    Also known as “Keiretsu” in Japanese, it is a series of cross-share holdings that form a complicated corporate structure under a single business group.

  • Clay Tokens – UAFRS vs AR Monthly Highlights | June 30, 2022

    It is a great compliment to say something ages like fine wine.

    It means that something has gotten better over the years. Over time, fine wine develops a more nuanced and complex flavor that is often thought of as higher quality. Similarly, a person who has “aged like fine wine” has gotten better over the years, often by becoming more dashing in appearance or more well-rounded in personality

  • Clay Tokens – UAFRS vs AR Monthly Highlights | April 30, 2022

    Three months ago, in Clay Tokens, we covered the concept of excess cash…

    Specifically, we discussed how not all cash is created equal. As Benjamin Graham identified in The Interpretation of Financial Statements in 1937: “there is a tendency to hold more cash than the business needs.”

  • Clay Tokens – UAFRS vs AR Monthly Highlights | March 31, 2022

    What does it mean to be “special”?

    Many folks typically think of things that imply being “better than” or “greater than” when it comes to something being “special.” Think special events, special promotions, or special athletes…

  • Clay Tokens – UAFRS vs AR Monthly Highlights | February 28, 2022

    The primary focus of investors can be summarized by one word: returns.

    Namely, investors would love to know how much of a return they will make on the capital they invested in a given investment. Of course, this is all but impossible in practice. Instead, investors often must settle for looking back at the returns they have made.

  • Clay Tokens – UAFRS vs AR Monthly Highlights | January 31, 2022

    These three words are used to describe different financial concepts, from a belief that cash is more valuable than other investment tools to an emphasis on cash in analyzing businesses to the importance of cash flow for the overall health of a business.

  • Clay Tokens – UAFRS vs AR Monthly Highlights | December 21, 2021

    In our most recent issue, we highlighted how M&A accounting violates the matching principle and misrepresents economic reality by consistently underreporting the profitability of an acquired company. This causes multiperiod distortionsin the acquiring firm’s income statement.

  • Clay Tokens – UAFRS vs AR Monthly Highlights | September 30, 2021

    When I teach advanced accounting to up-and-coming future accountants, I have to tell the students to just memorize GAAP rules and do what the standards tell them to do.

  • Clay Tokens – UAFRS vs AR Monthly Highlights | July 31, 2021

    Professor Baruch Lev is one of the foremost academic experts when it comes to analyzing the impact of deficiencies in corporate financial reporting.

  • Clay Tokens – UAFRS vs AR Monthly Highlights | June 30, 2021

    Last month, we highlighted Warren Buffett and his distaste for GAAP and IFRS accounting standards.

    This month, we turn to another all-time great value investor the co-founder of legendary hedge fund Baupost Group, Seth Klarman—for his take on financial reporting deficiencies in general and the focus of this month’s report… inflation or more accurately, currency devaluation

  • Clay Tokens – UAFRS vs AR Monthly Highlights | May 31, 2021

    When Warren Buffett talks, his comments are worth listening to. And if you were not already aware, Buffett has said a great deal about problematic accounting standards.

  • Clay Tokens – UAFRS vs AR Monthly Highlights | April 30, 2021

    I recently had a wonderful conversation with Ralph Nach. Ralph is a former co-author of the Wiley GAAP Guide. He teaches continuing professional education courses for practicing CPAs on many of the most difficult and complex accounting topics. Ralph was also one of the very first members of the UAFRS Advisory Council for Uniform Accounting.

  • Clay Tokens – UAFRS vs As-Reported Monthly Highlights | March 31, 2021

    Whitman built impressive investment results over decades. While he accomplished this feat, Whitman also found time to call out the problems with as-reported financial statements under GAAP.

  • Valens Research – UAFRS vs As-Reported Monthly Highlights | February 28, 2021

    No industry is free from the inconsistent rules of GAAP accounting that create extensive distortions from economic reality. In this issue, we highlight a chemicals company, a payroll servicer, and a diversified industrial conglomerate. Everything from net earnings to total assets is calculated in ways that seem almost arbitrary under Generally Accepted Accounting Principles.

  • Valens Research – UAFRS vs As-Reported Monthly Highlights | January 31, 2021

    Stock-based compensation (SBC) is an accounting headache. Just last year, PwC published a 250+ page report to help its clients navigate its intricacies.