Discussion of 'The Implications of Unverifiable Fair-Value Accounting: Evidence from the Political Economy of Goodwill Accounting'
16 Pages Posted: 6 Jan 2008
Date Written: November 2007
Ramanna (2007) provides interesting and novel evidence on how firms use contributions from their political action committees (PACs) to members of Congress as a means of lobbying for preferred positions on the two exposure drafts that led to SFAS-141 and SFAS-142. My discussion raises some concerns about his main conclusion: that pooling firms lobbied the FASB to obtain a fair value based impairment rule to facilitate their ability to manipulate financial statements. I offer a more benign explanation and make some other observations about how this line of research could proceed in the future.
Keywords: Lobbying, Fair value, Accounting Standards
JEL Classification: M41, M44
Suggested Citation: Suggested Citation