Category: News from the US

IFRS Confusion Abounds

In the past few years, much has been made of the plans to merge the accounting standards used in the US with those used by much of the rest of the developed world. In 2002, the US standards setter and the international standards bodies agreed to a framework for convergence of US generally accepted accounting principles (US GAAP) with the International Financial Reporting System (IFRS) in a document known as the Norwalk Agreement.1 Since then, the US and international bodies (known, respectively, as the Financial Accounting Standards Board, or FASB, and the International Accounting Standards Board, or IASB) have worked to align their respective standards so that, eventually, developed nations will have a homogenous accounting system. One particular point of difficulty in this effort, however, has been the issue of fair value accounting. The economic recession that began in 2007 further complicated convergence efforts as attention was drawn away from reconciliation efforts and focused on both placing blame and reforming the practices that caused the crisis. Then, with the election of President Barack Obama, the entire convergence movement was threatened when the newly-appointed chairwoman of the Securities and Exchange Commission announced that she would not “feel bound”2 by the convergence roadmap established by her predecessor.

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Do Stringent Underage Drinking Prohibitions Exacerbate The Problem?

After New London, NH police arrested 91 Colby Sawyer College students following a raid at an off-campus party, I couldn’t help but wonder if our nation’s drinking age and related policies weren’t contributing to the problem of underage drinking. Does barring our nation’s youth from an activity that is widely accepted, even encouraged, for those of legal age create a situation that compels minors to drink? After all, alcohol advertisements and sponsorships are widespread, be it at sporting events (including those at the college level), on roadside billboards, and in print and online publications. When underage individuals are continually confronted with alcohol, does it not make resisting the temptation to break the law that much more difficult?

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Fraud At For-Profit Colleges Shouldn’t Surprise

Recently, public-interest news organization ProPublica, in partnership with public radio’s Marketplace, reported on allegations of fraud and deceptive enrollment tactics at the University of Phoenix, the nation’s largest for-profit educational institution. While the allegations are both saddening and disconcerting, they should come as no surprise. After all, the University of Phoenix’s parent company, Apollo Group, is a publicly-traded entity whose shares are listed on NASDAQ. As such, Apollo Group and its subsidiaries have one responsibility, and one alone: to increase shareholder value.

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Port Authority Increases Fine For Entering EZ-Pass Booth Without Tag

My latest statement from NY’s EZ-Pass program included a notice indicating that, effective November 15, 2009, the fine for passing through an EZ-Pass booth at a Port Authority of New York & New Jersey (PATH) crossing without an EZ-Pass tag is increased to $50.

Not a terribly exciting piece of news, but awareness is key. The increase represents a doubling of the toll evasion fine for Port Authority crossings. This is the notice that came with this month’s EZ-Pass statement: PATH Toll Violation Fee Effective 11-15-2009.

Killing the ‘Clunkers’

Given that the government’s “Cash for Clunkers” program is nearly out of cash, I began to wonder what is happening to all of those clunkers. As it turns out, ABC’s Toledo affiliate WTVG was wondering the same thing.

As their reporter found, the dealers are responsible for permanently disabling the vehicle engines, after which the cars are sent to scrap yards to be recycled within 180 days. Considering how popular C.A.R.S. (the program’s official name, the Cash Allowance Rebate System) has been, it seems that the recyclers are winners right alongside the auto makers in the government’s effort to improve our fuel efficiency.

The most amusing part, to me, about the WTVG video is the dealer’s use of liquid glass to seize the engine; it certainly seems easier than crushing them.

AP: American Red Cross disaster funds are depleted

According to the Associated Press, its national disaster relief fund is depleted and its has started taking out loans to pay for relief in Midwestern states affected by recent flooding. Chief Development Officer Jeff Towers said “[we] would borrow to keep workers and volunteers in the field helping flood victims.” This announcement is troubling enough on its own, and is made worse by its timing. As the summer season swings into full force, so do natural disasters such as hurricanes, tornadoes, and heat waves. Current Red Cross estimates for Midwest flood relief put the figure around $15 million, but it could grow as large as $40 million. Mr. Towers reported that the organization has only collected $3.2 million through June 16. Impeding fundraising efforts are myriad problems ranging from the state of the US economy to aging baby boomers (a core donation demographic now finding itself with limited disposable income) to image problems resulting from the organization’s response to 9/11 and Hurricane Katrina.

The shortage of funds stems largely from a surprising problem: a lack of major disasters. Thanks largely to the widespread media coverage and awareness, major disasters account for a substantial portion of the funds raised to support the domestic disaster fund. The last few years have seen a series of smaller and mid-size disasters, such as isolated tornadoes in Kansas, and “silent disasters,” which do not garner the national and international attention that Hurricane Katrina did. This situation, perverse on the surface, leaves the Red Cross in an uncomfortable situation and puts disaster relief at the mercy of the Red Cross’ lenders.

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