Put That Accounting Class on Hold

As someone who’s never taken an accounting course in my life, I have often thought about doing so. But I’ve always managed to find a way to put it off. There are probably a lot of people out there like me — people who never had a burning desire to learn accounting but who, given the increasing complexity of personal finances, taxes, investing, etc., feel like they could use some guidance.

Well, it looks as if I should probably procrastinate a bit longer. According to this Wall Street Journal article by David Reilly, a lot of the rules of accounting are about to change. This would obviously affect corporate accountants much more than average Steves, but I think I’ll let the dust settle anyway.

I have to admit that, as an author, my first reaction to seeing this article was a primal one: a new set of rules will be great news for the people hired to write the new accountings texts, and sad news for the authors of the outgoing texts.

Here, from Reilly’s article, is the gist:

In coming months, accounting-rule makers are planning to unveil a draft plan to rework financial statements, the bedrock data that millions of investors use every day when deciding whether to buy or sell stocks, bonds and other financial instruments. One possible result: the elimination of what today is known as net income or net profit, the bottom-line figure showing what is left after expenses have been met and taxes paid. …

The project is aimed at providing investors with more telling information and has come about as rule makers work to one day come up with a common, global set of accounting standards. If adopted, the changes will likely force every accounting textbook to be rewritten and anyone who uses accounting — from clerks to chief executives — to relearn how to compile and analyze information that shows what is happening in a business.