Accounting

Steinhoff creditors face a shrinking pot

19 Dec 2017

The South African furniture retailer lost nearly a fifth of its market value after failing to clear up accounting issues. Its debt levels are increasing and insurers are withdrawing credit guarantees. The risk is that there’s less and less for creditors to fight over if it fails.

Steinhoff takes minimum first step in cleanup

15 Dec 2017

The departure of Chairman Christo Wiese was a prerequisite to shoring up trust in the embattled retailer. Surviving its accounting scandal presents more imminent challenges, though. Lenders must next week be persuaded to provide more money and jittery suppliers kept on side.

UniCredit NPL glitch muddies Italian bank cleanup

31 Oct 2017

The ECB is reportedly examining whether the bank inflated the price of a $21 bln bad-loan sale, a move that could hurt its capital. It’s surprising as UniCredit’s valuations were less rosy than peers. Regulatory confusion gives lenders more reason to cling on to dud loans.

Toshiba aims to please all with chip deal 2.0

29 Aug 2017

The electronics group is trying again to sell its $17 bln memory business and avoid a delisting. Bringing in the troublemaking and previously snubbed Western Digital will avoid legal delays, without tripping on antitrust. And the deal can still look Japanese enough for Tokyo.

Consumer giants’ disclosure is near sell-by date

25 Aug 2017

Firms that make food and personal-care products are pouring money into startups and young brands. Unilever, the most acquisitive, has made 15 such deals since 2014. Yet they don’t give investors enough information to judge their dealmaking nous. It could be their loss.

Chinese tech titans suffer credibility GAAP

16 Aug 2017

Online retailer JD generated quarterly profit of $144 mln. Apply conventional accounting practices, however, and it lost $42 mln. Alibaba also emphasizes figures that flatter by excluding stock-based pay. It widens a chasm with U.S. peers like Amazon that have kicked the habit.

Toshiba’s market reprieve could be fleeting

10 Aug 2017

The troubled Japanese group has finally filed audited accounts. Yet it could still be delisted if Tokyo’s stock exchange faults its internal controls, or if it cannot sell a memory unit in time. That would be painful for small investors, though bigger funds might stick around.

U.S. crackdown on Hong Kong auditors lacks force

27 Jul 2017

U.S. regulators have suspended a Hong Kong auditor after it refused to share a mainland issuer’s papers, citing orders from Beijing. The tough move won't resolve bigger problems in a weak U.S-China audit agreement, but renegotiation seems unlikely any time soon.

Toshiba has reason for Tokyo-friendly chip choice

21 Jun 2017

A team of two local outfits and a U.S. buyout firm are the preferred bidder for the $18 bln chip unit. That looks like a stitch-up. But Toshiba urgently needs this deal, and to minimise completion risk. It is betting it can bat off a legal dispute with partner Western Digital.

Insurers take one step closer to intelligibility

18 May 2017

New accounting rules will force insurers to give a clearer picture of their liabilities. That should sweep aside national oddities, and stop firms using outdated assumptions that complicate comparisons. Yet while a step forward, aligning capital positions will remain a chore.

PwC might have seen Oscars mixup coming

27 Feb 2017

The accounting firm presided over an error that saw the wrong movie initially named as best picture before "Moonlight" took the prize. PwC's audit work for numerous scandal-hit companies has shown how even established processes are no match for human sloppiness, buck passing and vacillation.

Rolls-Royce is on a slow flight to recovery

14 Feb 2017

The UK engine maker’s record 2016 loss of 4.6 bln pounds masks a better-than-expected underlying performance. Turnaround boss Warren East has limited scope to deliver more positive surprises. New engines are sold at a loss, and revenue for servicing them will take time to rise.

Market sceptics are alive and well in Hong Kong

19 Dec 2016

GMT Research claims Evergrande needs $22 bln of writedowns. That is bold, given the hard time local authorities and companies give sceptical analysts - including the developer's previous critics. This and recent short attacks are signs of resilience from the contrarian camp.

Review: Accounting isn’t dead, just depreciating

25 Nov 2016

Investors get just 5 pct of their information on stocks from earnings reports, say the authors of "The End of Accounting". Bean-counters struggle to get the measure of intangibles, big data and emerging markets. The authors offer some bold fixes, but there are simpler ones too.

Rolls-Royce recovery mired in accounting fog

16 Nov 2016

Under new accounting rules, the engine-maker's operating profit in 2015 would have been less than half the reported figure. Cashflows are unaffected, but are nothing to write home about. Boss Warren East says performance is improving. Investors can only take his word for it.

Bad finance: Japan Inc’s problem treasury shares

31 Aug 2016

Canon, Fujifilm and other blue-chips own lots of their own stock. Unnoticed, that can add phantom billions to valuations. Treasury shares can also bias bosses towards equity-heavy acquisitions or other deals that dilute shareholders. They should be cancelled, not held in limbo.