In the USA, American accountants know the ten accounting principles known as GAAP, Generally Accepted Accounting Principles which are part of the rules set by the Financial Accounting Standards Board (FASB). ‘Generally accepted’ is an odd expression to use. They should be accepted totally but why only generally. What, I wonder, are the parts that are…
Let’s take seven well known companies’ financial statements and see what they say about EBITDA. Amazon, GSK (GlaxoSmithKline), and Johnson & Johnson do not have EBITDA in their 2021 annual report at all. Roche, in their 2021 annual report, recognise my claim that EBITDA is not used by companies as a measure in their financial…
Now why would accountants calculate net profit, reverse part of the calculation, give it a name: EBIT, and not include it in the financial statements? Companies do not include EBIT in their financial statements because they don’t use it as an internal measure of profitability. Accountants outside the company use it to compare the…
The Irish Institute believes that their members become accountants to “lead in business”. In England and Wales accountants are a “force for change”, whereas the motivation to become a management accountant, CIMA is to “drive organisations forward”. One of my favourites comes from the Scottish Institute: “to have a rewarding career in business and beyond”….