FEI Weekly

October 18, 2019

Accounting for human capital, trusting robots (not humans) and keeping goodwill converged

Accounting for People

Harvard Business Review

Under U.S. Generally Accepted Accounting Principles (GAAP) companies report detailed information about their capital investments but have almost no reporting requirements related to human capital. The economy has grown in ways that leave the current rules behind, and that is having negative consequences. Detailed information on how much is spent and which types of employees get training may provide shareholders with a sense of how the company sees the future while further disaggregating operating costs.

Trust the Robots, Hug the Humans

CNBC

A report also suggests that AI-enabled platforms are changing employees’ relationships, specifically how much workers trust their managers. 57% of U.S. workers said they would trust a robot, over their boss, to answer certain questions and complete workplace to-dos. Human bosses are still most trusted to understand employees’ feelings, coach workers and create or promote a work culture.

The Battle to Keep Goodwill Converged

Bloomberg Law

The chairman of FASB and IASB agree that they rules around goodwill accounting need to be streamlined, despite the fact they largely disagreeing on the issue of whether companies should be allowed to amortize intangible assets. Both boards changed their approach to goodwill accounting several years ago, but now some FASB board members want to reintroduce amortization for public companies. “[If] we—collectively, both boards—believe we should change goodwill, we should change goodwill. And if we don’t then we shouldn’t.”

A Stable Workforce is Not All About Money

Fast Company

Google employees are planning a walkout on Thursday to protest the company's handling of executives that were accused of sexual misconduct. Two Google executives were given exit packages worth tens of millions of dollars after leaving the company following sexual misconduct allegations and a third executive that was allowed to stay at the company.

New Brexit Deal May Not Be a “Great Deal”

CNN

British Prime Minister Boris Johnson says the new agreement he struck on Brexit is a "great new deal.” but it would erect significant trade barriers for companies operating in the United Kingdom, reduce growth and leave the country poorer. The agreement creates new onerous customs checks and manufacturers in Britain might have to make two versions of every product or lose European customers. The UK services sector including banks, would also face new barriers.