Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

Furthermore, the operating managers cannot take their eyes off day-to-day operations to focus on innovation. That VC arm is given relatively unconstrained financial capital to invest in innovation and disruptive ideas. In the meanwhile, companies increasingly resort to provision of proforma and non-GAAP reports, even though this practice is looked down upon by the SEC and is opportunistically misused by a few companies. Analysts increasingly rely on non-GAAP metrics.

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The Dangers of Digital Protectionism

Harvard Business

These include access to digital goods and services, being part of global supply chains, accelerating and partaking in the fruits of innovation, and helping citizens access information, entertainment, and connectivity on a worldwide basis. follows Generally Accepted Accounting Principles (GAAP), developed through a rules-based approach. Philippe Intraligi/Getty Images. Many governments are currently rethinking their policies regarding cross-border data flows.

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GDP Is a Wildly Flawed Measure for the Digital Age

Harvard Business

As the market, including customers, employees, and investors, shifts the mix of what is done and what is consumed, this most important and commonly used economic indicator, along with Generally Accepted Accounting Principles (GAAP), tells a concerning story. Education and access may also need to evolve, to ensure that the benefits of technological innovation aren’t limited to an elite. HBR STAFF. Germany, Switzerland, and Japan are now in negative interest rate territory.

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On Creative Accounting: Two Creativity Myths

Harvard Business Review

Wall Street's " financial innovations " of recent years seem to have given creativity a bad name. As long as the new ideas cohere with ethical standards, and generally accepted accounting principles ( GAAP ), they can yield immense benefits. Tags: Creativity Ethics Innovation GAAP "Creative accounting" is really bad. Except when it's good. Say that in a roomful of managers, and you get nervous laughter.

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You Can't Impress Stock Analysts.and Shouldn't Try

Harvard Business Review

Who declared 7 or 10 or 15 percent growth in earnings a sacrosanct pursuit, above all other corporate goals — like the innovation that leads to novel solutions that address customer needs? In essence, they'll report their results to GAAP standards and as the SEC, FASB, and other quasi-regulatory bodies require.but they won't answer to analysts. ExxonMobil reported last week that its net income reached $10.3 billion.in just the third quarter.

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Calculating the Market Value of Leadership

Harvard Business Review

GAAP and FASB standards require financial reporting of earnings, cash flow, and profitability – all measures that investors have traditionally examined. To gain more insights into a specific firm, investors have shown more interest in intangibles like strategy, brand, innovation, systems integration, collaboration, and so on. In recent years, investors have learned that defining the market value of a firm cannot just be based on finances.

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