Population Statistic: Read. React. Repeat.
Monday, December 27, 2020

One currency, one trade market — and now, the EU gets a single set of Generally Accepted Accounting Principles, part of a streamlining of how Europe’s big companies do business.

Predictably, there was some griping:

Some European companies had lobbied to block the requirement that they deduct stock options from earnings, saying that it would put them at a disadvantage compared with competitors in the United States. However, the U.S. accounting rulemaker, the Financial Accounting Standards Board, this month announced a final rule on stock-option expensing that is expected to go into effect next year. The EU requirement is expected to take effect later in January.

This news comes in the wake of the luring of some emerging-market companies to London’s City stock market instead of U.S. exchange boards, ostensibly to avoid Sarbanes-Oxley requirements. I’m wondering if EU’s harmonized GAAP rules will make it less attractive for companies from China and the like to go to London instead of New York. Complying with the new rules isn’t supposed to cost companies any more. But, just as American firms have concocted all sorts of excuses as to why Sarbanes-Oxley is such a hardship, I’m sure Euro businesses will invent a litany of grievances over this development.

by Costa Tsiokos, Mon 12/27/2004 06:04:40 PM
Category: Business | Permalink |

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  1. They’re not really excuses when they’re true statements. SOx is a b*tch. The cross-referencing that document preparers have to do is insanely costly.

    Plus, all that tiny print and page flipping is a large part of why I just couldn’t do the work FT, school FT thing any-freaking-more.

    Comment by r* — 12/27/2004 @ 08:24:31 PM

  2. The side effect for my beat — Florida public companies — is that Sarbanes-Oxley is costly enough for mid-sized companies (around $50-100 million revenue) that some talk about going private in order to not have to deal with it. Since most Florida public companies fall in that range, it’s probably been a factor in companies going private or being acquired (although not as many as I’d have thought).

    I actually wrote a little about this last year (free registration required).

    While there’s no denying it’s an added burden, what I’ve experienced is more of a use of Sarbanes-Oxley as a catch-all for anything a company doesn’t feel like disclosing. I’ve had CFOs tell me they can’t give out detailed info because it would violate their compliance — a neat trick, since the point of that legislation is to make companies more transparent, not less. So that’s what I had in mind as far as “excuses”.

    Comment by CT — 12/27/2004 @ 09:01:43 PM

  3. Hmm, I thought your job was, like, glossy pop culture writing or something. What a great name for such a dry mag. I never would have realized otherwise!

    Comment by r* — 12/30/2004 @ 11:37:05 AM

  4. Why do I get the feeling I’ve just lost some of my coolness cachet…

    Comment by CT — 12/30/2004 @ 01:08:59 PM

  5. […] Friday, May 20, 2021 SARBANES-OXLEY AS SMOKESCREEN A while back, while making note of the scintillating topic of new European Generally Accep […]

    Pingback by SARBANES-OXLEY AS SMOKESCREEN Population Statistic — 05/20/2005 @ 07:17:29 PM

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