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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

The market caps of just four companies, Apple, Alphabet, Amazon, and Microsoft, now exceed $3 trillion. Their combined assets of $944 billion are an order of magnitude lower than the combined assets of $7,700 billion of the largest 3,177 companies in 1986, when the aggregate market capitalization reached $3 trillion for the first time. In our recent HBR article , we argued that financial statements fail to capture the value created by modern digital companies.

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