A high-profile group of financial analysts has protested against drastic proposals by accounting regulators International Accounting Standards Board (IASB) and its USA's Financial Accounting Standards Board (FASB) to scrap bottom-line earnings figures from financial statements, saying it would be detrimental to investors.
The Corporate Reporting Users’ Forum (CRUF), made up of senior research analysts from banks and fund managers, including Deutsche Bank, Merrill Lynch, Lehman Brothers, Fidelity and Hermes, said in a letter to both IASB and FASB they disagreed with the proposal not to state an earnings sub-total in a performance statement.
'We find an earnings sub-total particularly useful in enabling management to communicate with us,' the group said. 'A key step in our evaluation of companies is to forecast the future cash flows of the business.
'To achieve this we require clear and easily accessible data on the historical underlying operating income and costs of the business. In particular, we need to be able to identify quickly the elements that represent operating performance.'
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