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The article distinguishes liabilities and equity for hybrid financial instruments. It discusses the problem between creditors and business owners that impedes the development of distinction between liabilities and equity. It outlines the advantages of the Earned Capital Approach over the U.S. Generally Accepted Accounting Principles (GAAP) approach to distinguishing liabilities from equity. Possible objections to the prospect of classifying shareholder claims as liabilities are identified.

The article announces the winners of the 2022-2023 Lybrand Awards which recognize individuals who have made their exceptional contributions to the profession, including Lybrand Gold Medal for W. Eric Lee, Lybrand Silver Medal for Richard O'Hara, and Lybrand Bronze Medal for Margaret Shackell.

The article discusses the downsides of long-term use of stock buybacks including negative stockholder equity and financial challenges. Topics discussed include purposes of buybacks, impact of stock buybacks on return on equity (ROE), trends in the stockholders' equity and ROE of home improvement retail corporation Home Depot, accounting of stock buybacks using the retirement and cost methods, and operating income return on assets (ROA) as substitute of ROE.

The author evaluates the U.S.' last-in, first-out (LIFO) conformity tax provision. He contends that the rule forces managers to shortchange stockholders in either the financial statements or the tax return. He says without it, financial reporting would provide more useful information and the economy would be more productive.

The article refers to a controversy in the United States concerning the accounting treatment for stock options. The issues are how earnings are presented to investors and affect their evaluation of equity value, as well as the potential for shareholder dilution of equity when stock options are exercised. Two sources of confusion in the debate over stock options are: the relevant dates in the option's life and the different accounting methods used by firms to report finance and income-tax calculations. Relevant dates include the grant date where there is no earnings impact, vesting date where there is disclosure in a footnote, and exercise date where the option becomes an expense for tax purposes. The cash flow approach to equity valuation is mentioned.

The article discusses the investigation into the accounting practices of the American International Group Inc. (AIG) in 2005. The U.S. Securities and Exchange Commission (SEC) and New York State's Attorney General are investigating certain non-traditional re-insurance transactions made by the firm. Since the launch of the investigation AIG's stock lost 25% of its value. The company's 2004 financial statements were lowered by 12% and the shareholder's equity was reduced by 3%. AIG is developing a corporate-level compliance framework including implementation of compliance programs at its major business areas.