Remove Finance Remove GAAP Remove Management Remove Project
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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. Digital companies, in contrast, chase risky projects that have lottery-like payoffs. Digital companies, in contrast, chase risky projects that have lottery-like payoffs.

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A Blueprint for Digital Companies’ Financial Reporting

Harvard Business Review

The second category should describe the investments on future-oriented projects. By investing in digital companies, investors are often buying call options on moonshot projects with lottery-like payoffs. The current rules mandate no disclosures on future-oriented projects. Investors should have access to those estimates, too.

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