CFA Institute recommendations on quarterly reporting

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29 May 2007

The CFA Institute Centre for Financial Market Integrity and the Business Roundtable Institute for Corporate Ethics have jointly published Apples to Apples: A Template for Reporting Quarterly Earnings.

This report is based on concerns expressed at a series of symposia held in 2005 and 2006 addressing the issue of short-term thinking in today's financial markets. The report makes a number of recommendations for specific refinements to the content and organization of quarterly earnings releases to improve transparency. It includes an example 'template' of a third quarter earnings announcement. Click to Download the Report  (PDF 198k). The report is copyright CFA Institute and has been posted here with their kind permission.

Excerpts from Recommendations

To better enable all financial statement users to make consistent, apples-to-apples comparisons among quarterly financial reports, we recommend that all public companies voluntarily adopt a consistent template for quarterly earnings releases. The template would provide management with a user-friendly format in which to highlight issues of importance in an informative and concise manner. These recommendations are based on a comprehensive review of quarterly earnings announcements from a number of companies and discussions with financial experts and users of financial statements.

In order to improve the quality of communications between companies and investors, we strongly urge companies to issue quarterly earning reports that:

  • End quarterly earnings guidance
  • Include a GAAP income statement that starts at the revenue line and proceeds to net income
  • Position GAAP reconciliation tables in immediate proximity to the non-GAAP financial measures they are meant to illuminate
  • Include a balance sheet and statement of cash flows
  • Place information consistently


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