Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

So, investors, and therefore managers, might be adjusting their approach to risk accordingly. Therefore, companies see little value in disclosing the details of their current and planned projects in their financial disclosures, even if those disclosures can reduce the information asymmetry between investors and managers. Furthermore, the operating managers cannot take their eyes off day-to-day operations to focus on innovation. Martin Konopka/EyeEm/Getty Images.

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On Creative Accounting: Two Creativity Myths

Harvard Business Review

Say that in a roomful of managers, and you get nervous laughter. 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.

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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. People manager: To what extent do leaders build competence, commitment, and contribution of their people today and tomorrow?

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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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