With tax rules changing and interest rates set to rise globally, companies need to organize their operations around a new value equation.
Content: Article | Author: Liz Sweigart | Source: strategy+business | Subjects: Accounting, Finance
Make a commitment to the function that knows your company best.
Content: Article | Authors: Andy Ruggles, Mark Schofield, Michael Shehab | Source: strategy+business | Subjects: Accounting, Finance, Taxation
In a world rapidly switching to digital business models, the old ways of classifying industries and measuring business performances do not suffice anymore. So argue Barry Libert, CEO of OpenMatters, Megan Beck, the chief insights officer, and Wharton marketing professor Jerry (Yoram) Wind. In this opinion piece, they say it’s time to upgrade Standard & Poor’s Global Industry Classification Standard (GICS) and GAAP (Generally Accepted … [ Read more ]
Content: Article | Authors: Barry Libert, Jerry Wind, Megan Beck | Source: Knowledge@Wharton | Subject: Accounting
Forget ROE or EBITDA—and meet COROA, or “cash operating return on assets.”
Content: Article | Author: Shawn Tully | Source: FORTUNE | Subjects: Accounting, Finance
Many companies that look into changing their costing systems find that they are making mistakes, both large and small, that stem from the systemic failure of their cost-accounting systems to deliver actionable economic intelligence that they can use to optimize production, planning, and sales incentive systems (to name three of the most important areas for improvement). If your company makes anything, and particularly if you … [ Read more ]
Content: Article | Author: Robert Kugel | Source: Business Finance Magazine | Subjects: Accounting, Finance
If neither companies nor investors find GAAP reported earnings useful, it’s clearly time for a new approach.
Content: Article | Authors: Ajay Jagannath, Tim Koller | Source: McKinsey Quarterly | Subjects: Accounting, Finance
There are many things you can do to avoid failing as a manager. You can set clear expectations. You can highlight the underlying purpose of people’s work. You can correct people when they do something wrong. And you can praise people when they do something right. If you do all these things often and well, you will not fail as a manager.
However, neither will you … [ Read more ]
Content: Article | Authors: Donald O. Clifton, Ph.D., Marcus Buckingham | Source: Gallup Management Journal | Subject: Accounting
It’s not that big of a stretch to say that many CEOs – too many, perhaps – would rather learn how to hit a three wood than move up the knowledge curve on accounting. But just like you can’t ask your caddy or anyone else to hit a three wood for you, you cannot – or at least should not – ask your CFO to … [ Read more ]
Content: Article | Author: John McCallum | Source: Ivey Business Journal | Subjects: Accounting, Finance
Your financial statements may not make the bestseller list, but they do tell an intriguing story—at least to a banker. Unfortunately, the tale they tell may be misleading. Since finance is no place for fiction, you need to make sure your statements tell the truth, the whole truth, and nothing but the truth.
To do that, the first thing you need to know is that … [ Read more ]
Content: Article | Author: Kate Lister | Source: OPEN Forum (American Express) | Subjects: Accounting, Small Business
Skittish investors will not be surprised to learn that the bottom line of a company’s income statement fails to tell the whole story. New research by Jan Barton, an associate professor of accounting at Emory University’s Goizueta Business School, suggests that subtotals near the center of the income statement, such as operating income, have a much stronger association with contemporaneous stock returns than do the … [ Read more ]
Content: Article | Source: Knowledge@Emory | Subjects: Accounting, Finance
There is no accepted standard for appraising the worth of nonphysical assets like brands, human capital, and managerial expertise. Yet these are the essence of 21st-century business.
Content: Article | Author: Denise Caruso | Source: strategy+business | Subjects: Accounting, Finance, Management
Historical cost accounting is fading as Corporate America marches into a new era.
Content: Article | Author: David M. Katz | Source: CFO Publishing | Subjects: Accounting, Finance
Mark-to-market accounting rules require toxic assets to be carried on companies’ books at fire-sale prices, based on recent trades of similar assets for far less than they would command in normal times. Many big banks say the crisis has been made worse by these rules. Not everyone agrees.
Content: Article | Source: Knowledge@Wharton | Subjects: Accounting, Finance
Robert Herz and FASB are preparing a radical new format for financial statements.
Content: Article | Author: Alix Stuart | Source: CFO Publishing | Subjects: Accounting, Finance
The basic financial statements – P&Ls and balance sheets – are not enough to help investors clearly understand a company’s capability to generate value. The paper “Customer Equity: An Integral Part of Financial Reporting” recommends that companies start reporting “forward-looking customer metrics” by providing the value of their customer base and how it changes over time. This is especially important for companies whose customers are … [ Read more ]
Content: Article | Authors: Bernd Skiera, Julián Villanueva, Thorstein Veblen | Source: IESE Insight | Subjects: Accounting, Finance
It’s time to start preparing for the arrival of international accounting standards.
Content: Article | Author: Sarah Johnson | Source: CFO Publishing | Subjects: Accounting, Finance
Accounting techniques like budgeting, sales projections and financial reporting are supposed to help prevent business failures by giving managers realistic plans to guide their actions and feedback on their progress. At least that’s the theory. But when Gavin Cassar, a Wharton accounting professor, tested this idea, he found something troubling: Some accounting tools not only fail to help businesspeople, but may actually lead them astray. … [ Read more ]
Content: Article | Author: Gavin Cassar | Source: Knowledge@Wharton | Subjects: Accounting, Entrepreneurship, Organizational Behavior
Why the risk of wrongdoing has migrated from senior executives to middle management — and what to do about it.
Content: Article | Author: David M. Katz | Source: CFO Publishing | Subjects: Accounting, Finance, Management, Risk Management
Now open to public scrutiny, FASB’s codification tool is a one-stop shop for both accounting experts and newbies.
Content: Article | Author: Sarah Johnson | Sources: CFO Publishing, FASB | Subjects: Accounting, Finance
What is a company worth? The answer to this question can vary depending on who you ask and the purpose of the valuation. As a result, figures derived by an options trader, credit liquidator, and an acquiring firm will not only differ in amount but, more interestingly, in the methods used to reach them. While discounted cash flow methods are widely accepted as the most … [ Read more ]
Content: Article | Author: Pablo Fernández | Source: IESE Insight | Subjects: Accounting, Finance