Sunday, June 21, 2015

Beeing Seen in the Right Way

From corporate accounting to the travels of the super rich image management is the game.  It's important to be seen in the right manner.

The billionaire class travels the world attending a series of events.  PEUReport readers know well the Clinton Global Initiative, World Economic Forum (Davos), and Milken Institute Global Conference.  Not mentioned in the piece were Carlyle Group Investor meeting (a different CGI), the Bilderberg Group meeting (which alternates between the U.S. and Europe) or the Concordia Summit (brought to you by two kids of the super rich). NYT reported

So many rich people have been joining the circuit that a new “supercircuit” is emerging, one that has V.I.P. events within the V.I.P. events. 
Everything is a tool of the greed and power club.  That includes supercharged corporate accounting.

Companies, in effect, highlight performance that is based more on fantasy than on reality.

Corporations still must report their financial results under generally accepted accounting principles, or GAAP. But they often play down those figures, advising investors to focus instead on the numbers favored by those in the executive suite — who, it just so happens, stand to gain personally from the finagling.

Among the biggest costs these companies ask investors to ignore are those associated with stock-based compensation, acquisitions and restructuring. But these are genuine expenses, so excluding them from financial reporting makes these companies’ performance look better than it actually is.

This, in turn, makes it harder for investors to understand how their businesses are really doing and whether their shares are overvalued or fairly priced.
Accounting has its own fantasy league so C-suite players can earn the big money.

For the five years that ended in 2013, Mr. Ciesielski found that the number of cost items excluded from the reports of 104 large technology, health care and telecommunications companies had risen to 504 in 2013, up from 365 in 2009.

We’re talking real money. In 2013, Ciesielski also found that the difference between these companies’ GAAP profits and earnings without the bad stuff was $46 billion in 2013. This was down from 2012, but it was more than double the amount in 2009.

But perhaps the most disturbing aspect of the funny numbers used by companies is the way they serve to raise executive pay levels.
One needs money to attend the global events of the super rich.  They needn't be bothered by the plight of the little people, including retirees about to be screwed by a different accounting move

The trajectory says "super rich win yet again."  They want to keep it a secret.