This is our third installment on the recent CFA Institute monograph, A Comprehensive Business Reporting Model: Financial Reporting for Investors. The work, authored by a committee of experienced analysts, updates the 1993 commentary called Financial Reporting in the 1990s and Beyond. Like its predecessor, this report speaks forthrightly about the highly limited usefulness of current generally accepted accounting principles financial statements. (It's available without cost at http://cfapubs.org/.)The report's centerpiece is 12 principles that serve as a manifesto for replacing the status quo. We covered other principles in two earlier columns, and we now tackle a couple more.
Before doing so, it's worth a reminder that what you're about to read is not coming from two aloof academics. While we generally agree with what it says, the report expresses the frustrations of expert statement users who have to re-engineer GAAP financial information to get at least some idea of what they need to know. As prime consumers of financial reports, their views deserve careful consideration.
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