This Discussion Recently Took Place at the Stansberry Research Conference in Las Vegas
CAMBRIDGE, MA / ACCESSWIRE / October 11, 2017 / This past week at the Stansberry Research Annual Conference in Las Vegas, Professor Joel Litman, a renowned global expert on financial reporting and business valuation, forecasted that Uniform Accounting would replace GAAP and IFRS as the main financial data source for investors around the world.
Under the presentation titled, "The Dark Side of Earnings," Litman commented, "GAAP and IFRS have let investors down for decades. Global comparisons of business performance and valuations under GAAP and IFRS are now impossible. GAAP's wide range of inconsistent accounting policies makes even peer analysis of EPS and P/Es misguided and flawed."
According to the research Litman presented, Generally Accepted Accounting Principles and International Financial Reporting Standards force companies to report earnings under different sets of rules from year to year as well as different rules between even close competitors.
One of the case examples that drew great attention highlighted the inability of as-reported data to help with major investing decisions. Litman said, "In 2009, as-reported S&P500 earnings under GAAP collapsed by 95% because of overly aggressive write-offs known as 'big bath' charges. The fall in GAAP EPS far exceeded the actual fall in Uniform Earnings under UAFRS. Meanwhile actual stock market prices fell about 50%. How did this impact investors? The as-reported Price to Earnings Ratio skyrocketed, showing a high P/E sell-signal at exactly the time when an investor should have been buying."
Litman showed research identifying how stock market valuations actually fell faster than the Uniform EPS levels in 2009 for the S&P500, leading to a low "Uniform P/E" as a buying signal. He drew his examples from the website at www.valens-research.com.
The live case examples of individual companies drew highly positive feedback from the room of more than 600 active investors and high-net worth individuals. He also was interviewed after his presentation, and to see that video, click here.
The week-long Stansberry Research Annual Conference was held the last week of September in Las Vegas at the Aria Hotel & Casino. The conference drew hundreds of active investors and high net worth individuals from around the world. Professor Litman was one of several speakers on the opening day of the program, that also featured Kevin O'Leary from Shark Tank and the O'Leary Funds, Marty Fridson of Lehmann, Livian, Fridson Advisors LLC, and Kenneth Cukier from The Economist.
About Valens Research:
Valens Research provides regularly updated, economically relevant and reliable corporate performance, equity valuation, and credit analytics by deconstructing and then reassembling each company's financial statements into Uniform Adjusted Financial Reporting Standards (UAFRS) for each of over 5,000 companies around the world. The wide range of current and potential clients includes virtually anyone dependent on understanding and analyzing business performance and valuation with comparability, reliability, and accuracy. Valens Research's disciplined processes and analytics provide a valuable set of data and insights for users of financial statements of all kinds. For more information, visit www.valens-research.com.
Uniform Adjusted Financial Reporting Standards (UAFRS), also known as Uniform Accounting and Uniform Financial Reporting, represent an alternative set of standards for reviewing and analyzing financial statements aimed at creating more reliable and more comparable reports of corporate financial activity. UAFRS identifies more than 130 inconsistencies within GAAP and IFRS financial reporting that cause earnings, the balance sheet, and key financial metrics to be terribly distorted across peers and from year to year within single companies. UAFRS calls for repairing these distortions by adjusting the financials to adhere to one consistent set of accounting standards. This results in comparable and trend-analyzable Uniform EPS, Uniform Earnings, Uniform Assets, and other important metrics of corporate financial activity. For more information, visit www.uniformaccounting.com.
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SOURCE: Valens Research