An Analysis of the IASB’s Dissenting Opinions

Michael E. Bradbury* and Julie Harrison**

* Massey University

** University of Auckland

This draft: 10 October 2012

Initial draft: 29 March 2012

2

An Analysis of the FASB’s Dissenting Opinions

ABSTRACT

In this paper we report the results of a content analysis of dissenting opinions found in

International Accounting Standards Board (IASB) standards. During 2002 to 2009 the IASB

issued 26 financial accounting standards or amendments to standards. Twenty-five of these

standards contained dissenting opinions. We identify and classify the arguments in the

dissenting opinions using the methodology of Bradbury and Harrison (2012). We compare the

results of this analysis to the analysis of the FASB dissenting opinions for the period 1981 to

2009 contained in Bradbury and Harrison (2012). The results show that the IASB standards

are characterised by a higher rate of dissent reflecting the greater diversity of the IASB board.

3

An analysis of the IASB’s Dissenting Opinions

Introduction

A large body of research has examined constituent participation and lobbying of International

Financial Reporting Standards (IFRS) (e.g., Larson 2007, Georgiou 2010, Zeff 2010, Hansen

2011, Jorrison et al. 2012). Relatively fewer studies have examined the International

Accounting Standard Boards (IASB’s) due process. Fülbier et al. (2009) and Larson et al.

(2011) examine the role of academia in standard setting. Howieson (2009) examines agenda

formation. Whittington (2008) addresses the conceptual framework review. Larson and

Kenny (2011) examine the financing of the IASB. Chatham et al. (2010) examine issues

related to the development of international standards.

Dissenting opinions to International Financial Reporting Standards (IFRS) are an important

feature of the IASB’s due process. Dissenting opinions demonstrate the transparency of “due

process” by ensuring that all views have been considered. They improve arguments on

existing standards, because the basis of conclusion must consider dissenting arguments and

strengthen the counter arguments.

In this study, we analyze the content of IASB dissenting opinions, with a focus on the

arguments employed. That is, we apply content analysis to dissenting opinions and report

arguments based on themes relating to concepts (conceptual framework and non-framework),

logic, scope, outcome and due process. We also provide a comparative analysis and present

the corresponding results for FASB dissenting opinions over the period 1981 to 2009 reported

in Bradbury and Harrison (2012). An analysis of the arguments used in dissenting opinions

ought to be useful in the revision of the conceptual framework, thereby improving future

4

decisions.

The results for IFRS dissenting opinions are likely to differ from those of the FASB

(Bradbury and Harrison 2011) for two main reasons. First, there is a difference in the level of

authoritative support of the conceptual framework between the FASB and the IASB. While

both the IASB and FASB use the Framework in the development of future standards, under

IFRS the use of the Framework is embedded in the selection of, and changes in, accounting

policies (i.e., IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors,

paragraphs 10-12). Second, the IASB has more diverse constituents than a national standard

setter, such as the FASB (Tokar 2005). In the next section we raise conflicting hypotheses

with regard to the frequency of dissenting opinions and the reliance on Framework arguments

and non-framework conceptual arguments in dissenting opinions. Thus, it is important to

examine IASB dissenting opinions, rather than rely on evidence from the results from FASB.

This is even more important because the IASB/FASB joint programme has stopped and the

IASB is continuing to develop its own Framework (IFRS Foundation 2012).

The next section of the paper develops the research questions, describes the data and how we

analysed the content of the dissenting opinions. Results are then presented including a

comparison of the analysis of the IASB dissenting opinions to corresponding data reported in

Bradbury and Harrison (2012). The paper concludes with a discussion of the relevance of this

analysis for both the IASB current conceptual framework project.

5

Hypothesis Development, Method and Data

Hypotheses

Since the formation of the IASB in April 2001 it has assumed the role of global financial

reporting standard-setter. IFRS issued by the IASB are now required or permitted to be used

in more than 100 countries (IFRS Foundation 2011a), including most G20 countries, with the

major exceptions being the US, China, India and Japan. A key ongoing challenge facing the

IASB is demonstrating to stakeholders, notably the SEC, that it is a producer of high quality

standards (Zeff 2012).

The role of global standard-setter presents challenges for the IASB related to the growing

diversity of its members and constituents (Tokar 2005). Initially the IASB was dominated by

technical experts that were known to each other or had worked together previously as

national standard-setters. Subsequent recruits were less likely to be known by the existing

board, more likely to be users and not standard-setters, and were drawn from a wider pool of

nations (Zeff 2012). Such diversity in the composition and experience of the board will

inevitably create differences of opinions likely to impact the standard-setting process. Our

first hypothesis (1A) is that greater diversity in the IASB membership leads to more conflict

relative to a national standard-setter (i.e., the FASB).

The IASB has been subject to criticism related to the standard-setting process in relation to

potential bias and the impact of lobbying by constituents (Zeff 2002, 2012). Chatham et al.

(2010) argue that the IASB’s need for social approval can lead to greater flexibility in

standards (i.e., more accounting choice is incorporated to appease constituents, resulting in

lower quality standards). If this view is correct then as an alternative to 1A we hypothesize

(1B) that high levels of flexibility within a standard are likely to be associated with lower

6

levels of dissent. Another argument giving rise to an expectation of a lower frequency of

dissenting opinions is that the IASB was willing to sacrifice diversity in order to produce a

volume of timely standards.

We hypothesize (2A) that the higher authoritative status of the Framework provided by its

recognition in IAS 8 will result in higher frequency of qualitative characteristics, than the

FASB dissenting opinions. An alternative hypothesis (2B) is that the diversity of IASB

membership will lead to greater differences of opinion on the importance (or weighting) of

different qualitative characteristics and in non-framework conceptual arguments.

Method and Data

In this paper we identify and classify the arguments in the IASB dissenting opinions using the

methodology of Bradbury and Harrison (2012), developed from Bennett et al. (2006) and Yen

et al. (2007). This methodology uses content analysis to extract meaning from the dissenting

opinions by identifying common themes, coding items of interest and analyzing coded text

using statistical techniques (Bechtel, 1997). Dissenting opinions are first separated into

‘dissenting issues’ (representing single, specific objections to standard) and then coded into

‘dissenting arguments’ (using coding themes specified in Bradbury and Harrison 2012 and

reported in Table 1 Panel A). Table 1, Panel B summarizes the relation between the

dissenting opinion, dissenting issue and dissenting argument.

We analyze all financial standards issued by the IASB as either IAS or IFRS since its

inception in 2001 until June 2020 (n=26).1 The termination date coincides with the departure

1 Copies of the dissenting opinions were obtained from IFRS Foundation (2011b).

7

of Sir David Tweedie, the initial chair of the IASB. The selected text for analysis is the

dissenting opinion found in each accounting standard (n=25). The unit of analysis used is the

dissenting issue. Each opinion can have multiple dissenting issues (n=56). The majority of

dissenting opinions contained only one issue and the maximum is seven. Each issue can

have one or more dissenting arguments (n=218) and one or more “authors”.2 The dissenting

arguments were coded using the taxonomy in Table 1, Panel B. For consistency with prior

research, this taxonomy is the same as Bradbury and Harrison (2012), with minor

modifications to reflect new arguments raised in the IASB dissenting opinions. To ensure

the inferences drawn from our content analysis were “systematic, explicitly informed and

(ideally) verifiable” (Krippendorff, 2004, 25) identification of dissenting issues and the

coding of themes in dissenting arguments were performed by the two researchers

independently. This coding was based on the agreed taxonomy/coding manual (see

Appendix A). Any differences in coding by the two researchers were resolved by

consensus.

As an example of the coding process, the dissenting opinion to IAS 24 (related party

disclosures) contains one dissenting issue related to an exemption for government-related

entities. This issue is supported by three dissenting arguments coded as “costs versus benefits”

(“remove the unnecessary burden of collecting data”), “decision usefulness” (“the need to

inform investors”), and “comparability” (“no reason to make such a distinction”).

2 The “author” is the Board member who raises the dissenting issue.

8

Results

Level of Dissent

Table 1, Panel B details the number of standards and dissenting opinions analyzed. Only one

standard did not have a dissenting opinion. This compares to 50 percent of FASB standards

which have dissenting opinions (Bradbury and Harrison 2012). In addition, the number of

dissenting arguments per dissenting opinion is higher for the IASB (8.76) than the FASB

standards (7.01), as shown in Table 2. This provides support for hypothesis 1A that the

diverse geographic and cultural backgrounds of the IASB standard-setters makes it relatively

more difficult to achieve unanimous agreement compared to the FASB (a national

standard-setter). The alternative hypothesis that flexibility in standards and consensus

required to produce timely standards have comprised the debate (resulting in fewer dissenting

opinion) is not supported.

Summary of Arguments

Table 2 summarizes the arguments in dissenting opinions coded in accordance with the

taxonomy in Table 1. Conceptual, logic, scope and outcome arguments are the most common

in IFRS dissenting opinions. From the 219 arguments raised in all dissenting opinions, 127

(58%) are conceptual arguments, 43 (20%) are logic arguments, and 17 (8%) are scope

arguments. Similar frequencies are observed in dissenting opinion in FASB standards during

the period 1991 to 2010. Relative to the FASB, the IASB dissenting opinions place a much

greater emphasis on outcome arguments (9% compared to 7%) and less emphasis on due

process arguments (2% compared to 5%). In relation to the second set of hypotheses, the

results provide initial evidence that the difference in the status of the conceptual framework

between the IASB and FASB is not significant enough to affect the relative weighting of the

arguments used to object to standards, with most arguments related to accounting concepts

and logic.

9

Analysis of Specific Arguments

Conceptual Arguments

Table 3 summarizes the conceptual arguments in the dissenting opinions. Panel A comprises

“framework – qualitative characteristics”; Panel B “framework – other” and Panel C

“non-framework”.

The most commonly argued qualitative characteristic is reliability (25 argument or 20% of

total conceptual arguments, including the components of reliability). There are 6 arguments

specifically referring to reliability and 19 arguments referring to the components of reliability

(i.e., verifiability (0), neutrality (3), and faithful representation (16)). Comparability is the

second highest argued qualitative characteristic with 19 arguments (15%), followed by

decision usefulness (15), relevance and its components (11), cost-benefit (7), and

understandability (2). The concepts of predictive value, feedback value, verifiability,

materiality and completeness are not used. References to other parts of the conceptual

framework are reported in Panel B of Table 3. Six general references to the framework are

made, with nine specifically referring to definitions of elements of the financial statements

and one to risks and rewards.

The FASB’s dissenting opinions have a similar distribution. Most qualitative characteristics

are within + or – 2% of the FASBs. The IASB dissenting opinions have relatively fewer

arguments related to understandability 2% compared to 5%, more arguments related to

decision usefulness (12% relative to 6%) and more arguments referring to the elements of

financial statements (7% compared to 4%).

10

Non-framework conceptual arguments raised in dissenting opinions are reported in Panel C

of Table 3. Popular non-framework arguments used in dissenting opinions relate to

accounting objectives3 (7), management intent (7) and complexity (6). Other arguments are

practical difficulties (3) and conventional practice (2). Less popular arguments were also

raised in relation to disclosure as a substitute for proper accounting (1), matching fair value

amounts (1), objectivity/subjectivity (1), risk and rewards (1), transparency (1) and

uniformity (1). The “other” arguments (2) cover a range of different concepts such as

references to comprehensive income or capital maintenance that are infrequently mentioned.

IASB non-framework conceptual arguments in dissenting opinions are similar to those in

FASB opinions, except that management intent has higher frequency and “other” arguments

are used less frequently.

Logic Arguments

Table 4 summarizes arguments that disagreed with the logic within a standard. Most of the

arguments relate to the external consistency of the accounting treatment in other IASB and

similar pronouncements (22). External consistency is concerned with the consistency with

other IFRS. Arguments were also raised in relation to the internal consistency within the

standards (8) and general claims about the lack of logic (13). The IASB dissenting opinions

contain more logic arguments than the FASB, but the claims refer more generally to the lack

of logic than identify specific internal inconsistencies.

3 Arguments that refer to the objectives of the IASB or standard setting in general are classified as “other”

arguments reported in Table 8.

11

Scope Arguments

Table 5 summarizes the scope arguments. In 5 (2) of these dissenting opinions the authors

objected to a narrow (wide) scope. Other scope arguments relate to the inappropriateness (2)

of the standard or that other projects (8) needed to be completed first (e.g., the projects

considering the definition of a reporting entity (IAS 27) or lease accounting (IAS 17)). Most

scope arguments in the FASB’s dissenting opinions relate to inappropriateness. In comparison,

the IASB are concerned with the completion of other projects. This is also consistent with the

emphasis on external consistency in Table 4.

Outcome Arguments

Table 6 summarizes outcome arguments, where the author considers the standard will have a

negative impact on the users of financial statements. The IASB has almost twice as many

outcome arguments per dissenting opinion than the IASB. Furthermore, the arguments are

very different. The most prevalent outcome arguments raised are that the standard provided

no improvement (9) and was susceptible to earnings management (6). This is consistent with

the high frequency of management intent observed in Table 3. Given that the IASB have no

jurisdiction over the enforcement of IFRS, these dissenting opinions reflect a concern over

enforcement.

Due Process and Transitional Arguments

The due process and transitional arguments are summarized in Table 7. Due process

arguments relate to the process the IASB follows in implementing the standards. Transitional

issues relate to the transitional provisions, or lack of them, contained in the standards. Due

process arguments are infrequent (4) and less than half that of the IASB. This is perhaps

surprising, given the transitional issues facing wholesale adoption of IFRS. This suggests that

12

the standard-setting processes followed by the IASB are generally regarded as robust by

board members.

Other Arguments

Other arguments, summarized in Table 8, include residual arguments not elsewhere classified

in the taxonomy. Only standard-setting objectives, related the IASB’s or the accounting

profession’s role and objectives, are identified (8). Unlike the FASB, no evidence-based or

“personal belief” arguments were identified.

Overall, the results of the analysis of the specific arguments confirm our initial conclusion in

relation to the second set of hypotheses, that the difference in the status of the conceptual

framework between the IASB and FASB is not sufficient to significantly affect the relative

weighting of the arguments used.

Conclusion

In this paper we report the results of a content analysis of dissenting opinions in International

Accounting Standards Board (IASB) standards. All dissenting opinions (25) released by the

IASB in the period 2001 to 2010 are analyzed. We also provide comparative data from FASB

dissenting opinions (Bradbury and Harrison 2012).4

From this analysis we make the following observations. A much higher proportion of IFRS

4 We acknowledge that this comparison is imperfect, because (1) different time periods and (2) different

standards were issued.

13

standards have dissenting opinions (96%) compared to FASB (50%). This supports

hypothesis 1A that board diversity reduces the consensus on issuing accounting standards.

There is no support for the alternative arguments that accounting flexibility within standards

or the need for timely set of standards increases consensus.

However, the distribution of arguments across our taxonomy is similar between the IASB and

IASB dissenting opinions. There is a slightly higher rate of conceptual arguments raised per

dissenting opinion for IASB (5.08) relative to the FASB (4.14). However, there are similar

proportions between framework and non-framework. Non-framework conceptual arguments

in the IASB dissenting opinions are dominated by management intention, complexity and

accounting objectives. Accordingly, we reject our second set of hypotheses that the

difference in the status of the conceptual framework between the IASB and FASB will result

in a higher level of arguments in relation to qualitative characteristics and to greater

differences of opinion on the importance (or weighting) of different qualitative

characteristics and non-framework conceptual arguments.

The level of dissent in the IASB standard-setting process suggests the greater diversity of its

members leads to higher levels of dissent compared to a national standard-setter, such as the

FASB. However, this diversity does not appear to have a significant impact on the nature of

the arguments raised by the IASB compared to the FASB. Further, very few due process

arguments are raised in relation to the IASB standard-setting process. Therefore, the

diversity of the board does not appear, of itself, to generate different demands on the

standard-setting due processes.

14

Conceptual framework arguments (e.g., qualitative characteristics such as consistency and

reliability) are the most frequently used arguments by both the IASB and FASB. There

appears to be no significant difference in the rate these arguments are used, suggesting that

the perceived status of the conceptual framework for both organizations is similar.

Systematic use of non-conceptual framework arguments by the IASB (and FASB) suggests

such concepts ought to be discussed and either accepted or rejected in any conceptual

framework revision.

Logic arguments are common for both the IASB and FASB, but the emphasis for the IASB is

on external consistency with other IFRS. This many reflect greater pressure on the IASB to

develop consistent standards, compared to a national standard-setter, for the purpose of

promoting its processes as high quality and encouraging countries to adopt IFRS.

15

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18

TABLE 1 Coding of Argument

Panel A: Taxonomy of Arguments

Conceptual arguments – conceptual arguments focusing on the deficiencies in the

standard. These are classified as either conceptual framework – qualitative arguments

(e.g., qualitative characteristics of information), conceptual framework – other

arguments (e.g., definitions of elements of the financial statements) or non-

framework arguments.

Logic arguments - arguments that point out inconsistencies in the standard. These are

classified as internal inconsistencies within the standard or external inconsistencies

with other standards.

Scope arguments - arguments suggesting that the scope of the standard is too narrow

or too wide or the standard is not appropriate.

Outcome arguments - arguments focusing on the impact of the standard on external

users of financial statements (such as investors) or on internal operational decisions.

Due process arguments - arguments focusing on due process, rather than the content

of the standard.

Other arguments - arguments not falling in one of the above categories.

Panel B: Coding Hierarchy N

Population IAS, IFRS Issued 26

Sample Text Dissenting Opinion 25

Unit of Analysis Dissenting Issue 56

Themes Dissenting Arguments 218

19

TABLE 2 Summary of Dissenting Arguments

N

IASB

per DO

%

N

FASB

Per DO

%

Conceptual 127 5.08 58.0% 240 4.14 59.0%

Logic 43 1.72 19.6% 72 1.24 17.7%

Scope 17 0.68 7.8% 28 0.48 6.8%

Outcome 20 0.80 9.1% 27 0.47 6.7%

Due process 4 0.16 1.8% 21 0.36 5.1%

Other 8 0.32 3.7% 19 0.33 4.7%

Total 219 8.76 100.0% 407 7.02 100.0%

20

TABLE 3 Conceptual Arguments

N

IASB

per DO

%

N

FASB

Per DO

%

Panel A: Framework Qualitative:

Benefit > costs 7 0.28 5.5% 19 0.33 8.0%

Understandbility 2 0.08 1.6% 12 0.21 5.1%

Decision usefulness 15 0.60 11.8% 15 0.26 6.3%

Relevance 10 0.40 7.9% 19 0.33 8.0%

Predictive value 0 1 0.02 0.5%

Feedback value 0 0

Timeliness 1 0.04 0.8% 0

Comparability 19 0.76 15.0% 41 0.71 17.1%

Reliability 6 0.24 4.7% 5 0.09 2.2%

Verifiability 0 5 0.09 2.2%

Neutrality 3 0.12 2.4% 2 0.03 0.7%

Faithful representation 16 0.64 12.6% 35 0.60 14.5%

Materiality 0 0

Completeness 0 1 0.02 0.5%

Total framework qualitative 79 3.16 62.2% 155 2.67 64.5%

21

TABLE 3 Conceptual Arguments (continued)

N

IASB

per DO

%

N

FASB

Per

DO

%

Panel B: Framework - Other:

General reference 6 0.24 4.7% 13 0.22 5.3%

Elements of the financial

statements 9 0.36 7.1% 9 0.16 3.9%

Total framework-other 15 0.60 11.8% 22 0.38 9.2%

Panel C: Non-framework:

Accounting objectives 7 0.28 5.5% 9 0.16 3.9%

Complexity 6 0.24 4.7% 10 0.17 4.1%

Conservatism 0

2 0.03 0.7%

Conventional practice 2 0.08 1.6% 9 0.16 3.9%

Disclosure is not a substitute for

proper accounting 1 0.04 0.8% 2 0.03 0.7%

Duality 0

1 0.02 0.5%

Management intent 7 0.28 5.5% 3 0.05 1.2%

Matching 0

1 0.02 0.5%

Matching - Fair value 1 0.04 0.8%

Objectivity/subjectivity 1 0.04 0.8% 6 0.10 2.4%

Other 2 0.08 1.6% 12 0.21 5.1%

Practical difficulties 3 0.12 2.4% 5 0.09 2.2%

Risks & Rewards 1 0.04 0.8%

Transparency 1 0.04 0.8% 1 0.02 0.5%

Uniformity 1 0.04 0.8% 2 0.03 0.7%

Total non-framework 33 1.32 26.1% 63 1.09 26.3%

Total conceptual arguments 127 5.08 100.0% 240 4.14 100.0%

22

TABLE 4 Logic Arguments

N

IASB

per DO

%

N FASB

Per DO

%

External consistency 22 0.88 51.2% 35 0.60 48.4%

Internal consistency 8 0.32 18.6% 19 0.33 26.6%

Lack of logic 13 0.52 30.2% 18 0.31 25.0%

Total logic arguments 43 1.72 100.0% 72 1.24 100.0%

23

TABLE 5 Scope Arguments

N

IASB

per DO

%

N

FASB

Per DO

%

Narrow 5 0.20 29.4% 4 0.07 14.6%

Wide 2 0.08 11.8% 6 0.10 20.8%

Not appropriate 2 0.08 11.8% 12 0.21 43.8%

Complete conceptual framework project 0 - 3 0.05 10.4%

Complete other projects 8 0.32 47.1% 3 0.05 10.4%

Total Scope Arguments 17 0.68 100.0% 28 0.48 100.0%

24

TABLE 6 Outcome Arguments

N

IASB

per DO

%

N

FASB

Per DO

%

Bad accounting outcome 2 0.08 10.0% 9 0.16 34.0%

Earnings Management 6 0.24 30.0% 2 0.03 6.4%

Economic effects 0 4 0.07 14.9%

No Improvement 9 0.36 45.0% 3 0.05 10.6%

Public interest 1 0.04 5.0% 0

Valuation 0 1 0.02 4.3%

Volatility 2 0.08 10.0% 8 0.14 29.8%

Total outcome arguments 20 0.80 100.0% 27 0.47 100.0%

25

TABLE 7 Due Process Arguments

N

IASB

per DO

%

N

FASB

Per DO

%

Due Process 3 0.12 75.0% 14 0.24 66.7%

Transitional 1 0.04 25.0% 7 0.12 33.3%

Total 4 0.16 100.0% 21 0.36 100.0%

26

TABLE 8 Other Arguments

N

IASB

per DO

%

N

FASB

Per DO

%

Evidence-based standards 0 4 0.07 21.2%

Standard setting objectives 8 0.32 100.0% 13 0.22 66.7%

Personal Belief 0 2 0.03 9.1%

Total other arguments 8 0.32 100.0% 19 0.33 100.0%

27

APPENDIX A Coding Scheme for Dissenting Arguments

Category Coding Theme Description/ Terminology

Panel A: Conceptual Arguments

Framework

(qualitative

characteristics)

Benefit > costs

Cost-benefit

Data continuity

Lack of significance

Understandability Understandability

Decision usefulness

Decision usefulness

Informativeness

Obscures information

Meaningful

Useful

Relevance “Relevance”

“Irrelevance”

Predictive value Predictive value

Feedback value Feedback value

Timeliness Timeliness

Comparability (and

consistency)

Comparability – agree/ disagree

Inconsistency

Like with like transactions

Like with like entities

Reliability “Reliability”

Verifiability Verifiability

Neutrality

Neutrality

Evenhandedness

Inequity

Faithful representation

Faithful representation

Fact, economic reality

Accounting fiction

Misleading

Economic substance

Substance over form

Nature and circumstances

Underlying circumstances

Materiality Materiality

Completeness Completeness/ incompleteness

28

Category Coding Theme Description/ Terminology

Framework

(other)

General reference Conceptual framework reference

Objective of the conceptual framework

Definitions of elements of

the financial statements

Definitions of assets, liabilities, etc

Risks & rewards Risks

Non-Framework

Accounting Objectives

Fails to achieve objectives

Objective of accounting

Objective of financial reporting

Objective of financial standards

Objective of the standard

Complexity Complexity

Conservatism Conservatism

Prudent reporting

Conventional Practice Conventional Practice

Disclosure is not a substitute

for proper accounting

Disclosure is not a substitute for proper

accounting

Duality Duality – matching across entities

Management intention Management intention

Matching Matching

Matching – Fair Value Fair value matching

Objectivity/subjectivity Objectivity

Subjectivity

Practical difficulties

Practical difficulties

Unworkable

Unfeasible

Other

Realization

Additivity

Fair Value

Symmetry

Capital Maintenance

Comprehensive Income

Transparency Transparency

Uniformity Single method

Uniformity

29

Category Coding Theme Description/ Terminology

Panel B: Logic Arguments

Consistency

External consistency

Consistency external

External inconsistency

Inconsistency in treatment between this

standard and another standard (or similar)

Internal consistency

Consistency internal

Inconsistency between paragraphs in the

standard

Lack of logic

Illogical

Illogical

Unsound

Irrational

Lack of conceptual basis Lack of conceptual basis

Arbitrary Arbitrary

Arbitrary rules

Adequacy of other

provisions

Adequacy of other provisions

Lack of internal logic

Lack of logic

Lack of internal logic

Incompatible premises

Lack of reasoning

Lack of reasoning

Unjustified

Fundamentally defective

30

Category Coding Theme Description/ Terminology

Panel C: Outcome Arguments

Internal Internal Impact Internal impact

External

Bad accounting outcome Bad accounting outcome

Earnings Management Earnings Management

Economic effects Economic effects

No Improvement

Lack of improvement

No improvement

Does not use best available information

Offsetting Offsetting

Public interest Public interest

National economic policy issue

Valuation Valuation

Volatility

Fluctuations

Volatility

Under-statements

Over-statements

31

Category Coding Theme Description/ Terminology

Panel D: Scope Arguments

Narrow Narrow

Narrowing advocated by standard

Objection to a provision that narrows scope

Objection to exemption, special provisions

Should have addressed

Insufficient guidance

Wide Wide

Widening advocated by standard

Objection to a provision that widens scope

Objection to inclusion

Should include additional exception

Objection to broader application

Objection to inclusion

Not Applicable

Not Appropriate

Inappropriate

Importance of the issue

Provision advocated by standard

Objection to a provision applying

Futility

Lack of importance of the issue

Urgency/lack of urgency

Complete conceptual

framework project first

Conceptual framework – complete project

first

Complete other projects first Complete other projects first

Guidance not standard

required

Guidance not standard required

32

Category Coding Theme Description/ Terminology

Panel E: Other Arguments

Evidence-based

standards Evidence-based standards

Empirical argument

Examples

Lack of empirical evidence

Lack of practical requirement

Standard setting

objectives

FASB Board’s and

Accounting Profession’s

Objectives

Board’s responsibilities

Credibility

Judgment by Board

Leadership in standard setting

Loss of initiative

Perceived threat to standard-setting

Precedent-setting departure

Professionalism

Visibility

Personal Belief Personal Belief Personal belief

Panel F: Due Process Arguments

Due Process Due Process Due Process

No Public Submission

Transitional Transitional Objection related to transitional provisions