Amid strong US dollar, analysts want business leaders to adjust how they report earnings

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Analysts want business leaders to adjust how they report earnings amid strong US dollar (Wall Street Journal)

When the US dollar is strong, companies talk about their financials in a very different way.

“On conference calls this earnings season, corporate executives harped about how well the business performed excluding currency effects and about increasing revenue on a currency-neutral basis,” reports The Wall Street Journal.

Analysts are becoming frustrated by financial reports, which they claim do not draw a clear picture of a company’s financial health.

“The reality is we’re getting a positively biased perspective,” George Sutton, a stock analyst and co-director of research at Craig-Hallum Capital Group LLC in Minneapolis, told The Journal.

“A few years ago, when the dollar was weak, it was fairly rare for companies to point out that they were doing so well because of the currency,” he said.

The definition of what a business is may be about to change (Journal of Accountancy)

The Financial Accounting Standards Board is hoping to clarify the definition of what constitutes a business.

The board wants to “help financial statement preparers evaluate whether they should account for transactions as acquisitions or disposals of assets or businesses,” according to the Journal of Accountancy.

Under the FASB’s proposal, “a business would not exist when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.”

The FASB argues that the very definition of a business is used too broadly. The current definition can “lead to transactions being reported as acquisitions or disposals of businesses rather than assets,” the publication reports.

The supply chain is becoming increasingly complex (

Globalization is creating a supply chain that is growing in complexity.

The complex nature of the supply chain is forcing companies to evaluate how they examine their partnerships with various suppliers located around the world.

Keeping a close eye on overseas suppliers is “an expensive proposition, to say the least,” according to

The publication provides insights into how smaller businesses can monitor the supply chain, how they can navigate increasingly difficult international legal matters, and how business leaders can develop better strategy for the supply chain.

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