S&P mulls the new accounting proposals

From PropertyCasualty360:

A recent analysis from Standard & Poor’s concludes that “changes in interest rates could cause potentially significant swings in earnings and capital.”

The ratings firm said that although its credit analysis focuses on the financial condition of a company regardless of accounting, changes like a new format for the balance sheet, income statement or disclosures “may bring to light information that we would need to consider in our analysis,” S&P said.

Other insights:

  • The proposals would allow better comparisons of insurers in different countries.
  • Long-term historical comparisons would be difficult, since the new standards are radically different.

S&P is the first I’ve seen to acknowledge the QWERTY problem: Current standards are flawed but sophisticated users know how to adjust for them. And a change creates a steep learning curve.

Like most, though, S&P seems to believe the new standards are worth the effort.

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One thought on “S&P mulls the new accounting proposals

  1. […] This post was mentioned on Twitter by Reactions and Jim Lynch, Jim Lynch. Jim Lynch said: S&P mulls the new accounting proposals: http://wp.me/pSIxF-IA […]

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