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Clearer definition of a business called boon for CFOs (CFO.com)
The Financial Accounting Standards Board has called for a more clearly defined definition of the term “business.”
The FASB hopes to make it easier for companies to perform M&A accounting by providing them with a clear difference between what makes up a business versus an asset.
“Many stakeholders have said that the current definition of a business is applied too broadly, requiring many transactions to be treated as businesses when they should be treated as assets,” CFO.com says.
A news release from the FASB on November 23 says critics “noted that analysing such transactions is costly and complex.”
A clearer definition “would make it easier for CFOs to report that their companies are acquiring an asset rather than a business,” CFO.com says. Even a simple change to the definition “could be a big boon for their companies in terms of saved time and expense.”
The proposed definition update is open for public comment until January 22.
There is a growing disconnect between some management teams and their investors. That disconnect is forcing investor relations teams to shift into a strategy-based role.
“With growing business and market complexity, the role of investor relations has evolved to become more strategic,” says Deirdre Dastous, vice president and head of global intelligence at Nasdaq.
“Due to fundamental changes in the brokerage industry and sell-side, many companies — especially smaller and medium-sized businesses — are struggling to attract or maintain analyst coverage,” Dastous warns.
Expedia CFO Mark Okerstrom says his company is closely watching Airbnb and realises that the company, currently based on a sharing-economy model, could enter into the hotel-booking business in the next few years.
Skift reports that during a talk at the Credit Suisse Technology, Media, and Telecom Conference in Phoenix on December 1, Okerstrom said, “Airbnb will face tough competition from established players such as Expedia and Booking.com.”
“I think also to the extent that, that Airbnb type inventory becomes a true substitute for the mainstream lodging product, I think, for us the HomeAway acquisition provides not only a perfect hedge, but a perfect opportunity to actually go after that new market,” Okerstrom adds.
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