The COVID-19 outbreak has brought out some creative accounting at companies, as executives attempt to gauge the impact of the pandemic on their businesses and how they would have performed if the crisis hadn’t all but shut the economy down.
“ “People will get creative telling their story and our message is to be cautious of the creativity.” ” There are questions, however, about the validity of adjusting away business activities related to a global health crisis when it’s unclear how long the pandemic will crimp Uber’s business. The company did not break down the drivers of that earnings impact in its release, but provided some more detail in a supplemental investor-briefing file. That file cited incremental bad debt expenses, March Madness production shutdown costs, and payments to front-line workers, as well as their impacts on reported Ebitda, amounting to about $430 million, or 5 cents a share.
Peer Verizon Communications Inc. VZ, +2.97% took a different route, disclosing that the pandemic had a 4-cent negative impact on both reported and adjusted earnings per share, mainly related to an increase in the company’s bad debt reserve. “Firms will insist some of the costs will be non-recurring, and to some extent that’s true, but they’re probably going to dump all kinds of costs in this period that would have otherwise affected the firm in the future,” he told MarketWatch.
HerschbeinCPA
GAAP or GTFO
South Africa South Africa Latest News, South Africa South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: Forbes - 🏆 394. / 53 Read more »