re: Pro Forma Accounting
Always a pleasure to hear from Per Lindberg.
Related to article you posted:
>> European Interest Grows In Pro Forma Accounting
The Wall Street Journal
US Abstracts
Financial Times
Jan 8, 2002
A spokeswoman for Nokia Corp., the mobile phone company based in Finland, has defended its decision to adopt pro forma accounting, saying it also releases audited results and that its investors wanted a better insight into Nokia's operations, which pro forma reporting satisfies.
However, accountants and analysts in the US have expressed concern over the fact that a number of large European companies have decided to adopt the practice, which was championed by American-based Internet companies in the late 1990s. Pro forma accounting presents certain items, such as asset write-offs and restructuring costs, as if they did not exist. As a result Nokia was able to report pretax profit of around 1.1bn euros ($984.3m) when it would have been reported as 281m euros if International Accounting Standards methods had been applied.
A study undertaken by Scottish-based financial researcher Company Reporting Ltd reveals 9% of 400 companies it surveyed in the UK adopted pro forma accounting during 1999 to 2001, an increase of 3%. Of the 78 large companies assessed, 28% used pro forma accounting. <<
- Eric - |
