- Not breaking out segments on plea of activity being 'single','integrated' even in cases where they are clearly not so. And even when segment disclosures are given, a large portion of segment assets/costs are loaded to the corporate pool on the plea of 'not able to identify due to common usage'. It fails me that when cloud computing SAP solutions/high tech options are available at low costs, how can companies take this excuse
- Refusing to writedown impaired investments on the grounds that they are 'long term/strategic, intention to dispose not there', 'valuation reports support higher view etc'.
- Ignoring events occurring after balance sheet data, especially if non financial. For instance, LIC Housing Finance did not even mention the arrest of its MD in its Jan-11 quarterly result. And the recent Arab/other crisis got short shrift in the Dec-10 ending results/annual report. I agree that investors equipped with Google News would anyway know this public information, but it is good to hear about the impact from the horse's mouth('company')
- Despite the clear standards on inventory accounting, atleast one prominent diversified tea company is unable to break out its tea leaf production cost due to the 'integration of stages' etc. For a company subject to cost audit-which verifies this information and much more cost data, this excuse is pathetic.
Sunday, April 10, 2011
Does your investee company make a mockery of accounting standards?
The accounting standards for segment reporting, interim reporting, inventory, impairment, events occurring after balance sheet date etc would have brought hope to some investors seeking additional information to understand the company better. But my sample of company annual reports(admittedly non exhaustive/non representative) brought out quite a few examples like