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Lessons learned from a $2 bill

Chris Noe $2 Bill

Back in 1976, when eight-year-old Christopher Noe pocketed his first $2 dollar bill, little did he know the impact it would have on his professional career. Fast forward four decades and that bill— along with a collection of others Noe has accumulated through the years—has been a central prop in Noe’s 20 years of teaching at MIT Sloan.

“I have a lucky $2 bill that I carry in my wallet and use in the classroom to illustrate a concept in accounting called fair value,” says Noe, who explains the concept in layman’s terms as “an unbiased estimate of the potential market price of a good, service, asset, or liability.” Fair-value accounting is often contrasted with historical-cost accounting, and the two approaches are often debated in academic and business circles.

Noe, who teaches in the MIT Sloan Executive Education course, Strategic Cost Analysis for Managers, recounts a serendipitous moment while teaching during which he pulled the bill out of his wallet and was delighted to see a half dozen students do the same. One of those students was so interested in the unusual bill that he began a blog on the topic, which attracted the attention of a documentary filmmaker John Bennardo. The filmmaker included Noe and his MIT Sloan lecture in his film, “The Two Dollar Bill Documentary.” Bennardo filmed Noe asking students what the $2 bill is worth—a topic that always results in an interesting class debate. Typically, a student might answer that the bill is worth $2. Noe will agree, but points out that his 1976 bill is nearly 40 years old. Someone will then look it up on eBay and say it’s worth $8 as a collectible.

So, which is more correct? There’s not one final answer, and therein lies the illustration of the distinction between historical-cost and fair-value accounting.

Accounting aspirations lead to a fruitful career

As a young adult Noe—who was born in Buffalo, NY, and grew up in Atlanta, GA—earned a PhD at the University of Rochester and headed to Boston to teach in higher education. After several years at Harvard Business School and a few more at a Boston-based economic consulting firm, Noe joined MIT Sloan in 2011. From a young age, Noe had aspirations of pursuing a career in the field of economics, which were fueled by his interest in that $2 bill, as well as advice from his college advisor.

The accounting expert has parlayed that ambition into a successful and fulfilling career, and today, Noe’s research focuses on developing case studies for use in the course curriculum at MIT. Noe is proud of the contribution his authored case studies have made to the field and the fact that the cases are taught at leading business schools around the globe. In addition, Noe is working on an academic study that examines how companies change their communication with investors about competition surrounding Department of Justice anti-trust enforcement actions. While the study is still in its preliminary phases, he is hopeful that the work will help shed additional light on how companies adapt their public messaging in response to regulatory scrutiny.

The changes and challenges in the fields of accounting and finance

While the challenges faced by businesses today are many when it comes to the fields of accounting and finance, there are some that are most pressing, according to Noe. “Increased regulation in the past 10 to 15 years, coupled with increased demand for communication from investors, has resulted in U.S. public companies having to devote more resources, and perhaps most importantly, more of senior management’s time, towards investor relations activities.” Because of these changes, Noe says senior managers now find themselves spending more time preparing for quarterly investor conference calls, attending investor conferences, and hosting investor meetings.

For young professionals who are interested in pursuing a career in accounting or finance, Noe has some advice. “To increase marketability in those fields, an understanding of tax issues—particularly international tax issues—is a valuable asset. There’s also value in understanding international accounting standards. As more countries adopt those standards, fluency in them increases the flexibility of where someone can work and the types of companies he or she can audit.”

Life beyond the $2 bill

When he has a chance to take a break from his professional work, Noe does a bit of a 180 in terms of leisure activities. The expert accountant is also an avid participant in Spartan obstacle course races—a sport where the competitor must overcome various physical challenges in the form of obstacles such as climbing over walls, crawling under barbed wire, and jumping through fire. Since 2014, Noe has participated in close to twenty races and has been able to apply much of what he has learned on the race course to the classroom.


Christopher Noe’s MIT Sloan Executive Education course, Strategic Cost Analysis for Managers, focuses on the day-to-day issues that arise in accounting-based management practices, such as the cost of making a product, the price of a service, and how to evaluate the performance of employees.

This entry was posted in Finance on Sat Aug 05, 2017 by MIT Sloan Executive Education

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