Does the media understand public accounting?

The short answer is no. Here is a story from the Associated Press that claims the FASB is going to “tackle the thorny question of accounting for leased equipment and property.” Excuse me? Have we just been ignoring leases until this point? Does any journalist do research any more?

Lease accounting isn’t new, although it is constantly being revised due to the complicated financing arrangements implemented by business. There are very few differences between accounting for leases between the US and Canadian GAAP. As with every other area of accounting, we just follow business – if the arrangement is complicated, then the accounting for that arrangement is likely to be complicated.

Stock options are another area of complication, and one where ordinary journalists (and even those who are primarily business journalists – a contradiction in terms if I’ve ever seen one) often mix up the facts for the hysteria.

When you read something in the mainstream media about public accounting, please take it with a grain of salt because it is inevitably rife with misinformation, either deliberate or otherwise.