Study Group: Telecommunication Service Industry Financial Statement Analysis Experts

GLG News^SM Analyses by this Study Group's Leading Experts(?)

Truth is truth, whether it's welcome news or not

July 7, 2009

Analysis by:Paul Miller, Professor,

Analysis of:The Fair Value Deadbeat Debate Returns | www.cfo.com

Financial reporting works best, and maybe only, when it is complete and unbiased.  If it is biased to manage the message, it becomes a method of distributing propaganda and all credibility is lost.The economics of gain occurrence is unarguable.  If management can retire a debt for a smaller amount than the carrying value, then there are fewer liabilities and more equity.  More equity means income has occurred.  There is no rationality behind efforts to suppress truthful news just because you don't like it.  Let's all hope the standard setters are not swayed by "visceral" impulses into the direction of keeping useful information out of financial statements.  The inevitable consequence is greater risk and discounted share and bond prices, simply because users don't have access to the truth.  That does no one any good.

Exacerbation or exposé?

October 13, 2008

Analysis by:Paul Miller, Professor,

Analysis of:Alls Fair: The Crisis and Fair-Value Accounting | www.cfo.com

undefined undefined Listen to the message and don’t shoot the messenger if you think it’s bad news. And don’t endorse public policies based on deceptive reporting. undefined undefined

Is it bad reporting or does naivete reign at the highest levels?

August 7, 2008

Analysis by:Paul Miller, Professor,

Analysis of:Mulling the Fair Value, Historic Cost Choice | www.cfo.com

Maybe it's just me, but these quotes from Herz and Pozen are off-base. When they suggest there could be a pure historical cost system, they are talking about something that doesn't exist and hasn't existed in a 100 years, if even then. I have to believe that Herz was misquoted or misinterpreted; I can believe that Pozen would misunderstand. Nothing will come out of this. There will be no turning back to more costs. There will be a continuing progression toward fair value accounting for the simple reason that it produces the information that users want and that society needs them to have.undefined undefined

Accounting for subprime investments: Denial is not a river in Egypt

April 7, 2008

Analysis by:Paul Miller, Professor,

Analysis of:SEC fails to douse debate over ‘fair value’ | www.ft.com

This article reveals the bizarre mindset of managers who (a) want to take huge risks for a shot at high returns, (b) don’t mind reporting results when they succeed, but (c) don’t want to report their losses. To put it another way, they want to invest in risky securities but report income from their ventures as if they put money into certificates of deposit. There is no legitimacy in twisting the accounting to cover up the results, and no reason to blame the chief accountant or FASB for the problem, or to expect the regulators to take them off the hook by allowing the losses to be hidden.

Cash flow manipulation is real

October 29, 2007

Analysis by:Paul Miller, Professor,

Analysis of:Cash Flow Manipulation – Analyzing and Identifying | theharrissolution.com

You can never judge a book by its cover or a seminar by its flier, but Harris Solutions is on to something here.  If you have accepted the SCF as pure and not manipulable, you may very well want to attend to find out more about the sly maneuvers on the fringes of GAAP that pump up the operating cash flow.  A couple of examples appear below.

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