I studied financial accounting in the graduate biz school at NYU. What I remember from the course came from a student question and the instructor's answer. The instructor had been lecturing on the tax books and the shareholder books, etc. The student asked "Which are the real books?" The answer, after a brief pause: "Oh, the real books are upstairs." In other words, Sabri, I agree with you.
Gene On Nov 6, 2011, at 9:20 AM, Sabri Oncu wrote: > There is a large earnings management literature in accounting devoted > to the study of accruals. Depending on how the accruals are reported > the reported earnings change. Another thing that can be managed in > addition to the accruals are the loss reserves for banks and insurance > companies and the list continiues. Cash-flow based measures are always > better than accrual based measures in my view. Also, if the > denominator contains values of some intangible assets such as > goodwill, brands and the like, the measured profits get noisier. > > Best, > Sabri > > On 11/5/11, Sabri Oncu <[email protected]> wrote: >> Shane: >> >>> The measure of (in Marxian terms) "profit" comprises, on an after-tax >>> basis: net rental income, net interest income, total executive salaries, >>> total dividend income, and (net of properly computed capital >>> consumption) >>> corporate retained earnings. >> >> For us mathematicians such words as "properly computed" are vague. >> >> What does "properly computed" mean? >> >> I am sure lawyers and regulators can find an answer. If you don't >> believe me, just read Basel I, II and III or GAAP (Generally Accepted >> Accounting Principles). >> >> Best, >> Sabri >> > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
