An Examination of the Financial Statement Effects of the New Exposure Draft on Business Combinations.(Financial Accounting Standards Board)

Ohio CPA Journal, The, July, 2001 by Cocco, Anthony F.; Moores, Tommy

In September 1999, the FASB issued an Exposure Draft (ED) of a financial accounting standard, Business Combinations and Intangible Assets. In this article, we first describe the key provisions of the ED, and modifications to those provisions that have been subsequently announced by the FASB. Second, we provide a brief overview of how the stock market generally reacts to earnings numbers, and recount the increasing use of a measure called "cash earnings" by the stock market. Then, we will combine these two discussions into an examination of the financial statement effects of the ED and the potential stock market reaction to those effects.

In Sept. 1999, the Financial Accounting Standards Board (FASB) issued an Exposure Draft of a Statement of Financial...

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