Not even WSJ reporters get FASB accounting standards. Why write more of them?

For an eloquent illustration of how accounting innovations like FAS 157’s “fair value” regime are way beyond even above-average American financial readers, try Michael Rapoport’s May 1, 2009 article entitled
New FASB Rule Aims to Clarify ‘Net Income’.

Rapoport, trying to capture the meaning of the new SFAS No. 160, stumbles over one of the most basic concepts in the accounting literature — that “minority interests” in consolidated financial statements reflect the fact that “parent” companies don’t really “own” 100 percent of the assets or income of “subsidiaries” except those they wholly own.

If Coca Cola owns only 51 percent of Coca Cola Enterprises (it doesn’t, but let’s pretend that it does), Coca Cola’s consolidated net income should not include the 49 percent of CCE it doesn not own.   Sounds simple, doesn’t it?

Rapoport is no financial dummy.  No one who authors articles like this one on derivatives accounting could be.  So if a  guy like Rapoport is confused by SFAS No. 160, just imagine what SFAS No. 157 and 133 do to the average investor!  Against such a backdrop, why bother writing more standards?