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US SEC preparing to scrap quarterly reporting requirement

reuters.com

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Re: US SEC preparing to scrap quarterly reporting requirement

#451

Post by FateOfNations »

jefftk wrote: post #369
fourseventy wrote: post #162

Earlier quoted context omitted.

That doesn't make any sense because the revenue is already booked for the sale which has nothing to do with when the delivery truck actually arrives.

This is not correct. A business this big would definitely be using accrual accounting (not cash) which generally means you count the revenue when the actual ownerships transfers to the buyer. Since the truck was operated by the seller, the transfer of ownership is almost certainly counted as when the buyer receives the goods.

Rewrite the anecdote with the truck racing to the supplier to make the pickup on time.

Re: US SEC preparing to scrap quarterly reporting requirement

#452

Post by arduanika »

Karrot_Kream wrote: post #448
arduanika wrote: post #299

Earlier quoted context omitted.

Yeah. It's not obvious how to do it. I just wish that policy people would do some thinking in this direction. (Nit: I believe that in venture contexts, LP = "limited partners". A "liquidity provider" usually means the same thing as a market maker, at which point you're talking about the secondary / listed / public markets.)

(re Nit: depending on your terminology, liquidity provider can be many things and in modern markets one can argue that the concept of a "market maker" isn't a practical reality if how liquidity flows, but that's also why I wrote the edit to clarify which LP I was talking about)

(Oh, I see now what you meant. Cool.)

Re: US SEC preparing to scrap quarterly reporting requirement

#453

Post by mixdup »

CSMastermind wrote: post #283
davorak wrote: post #271

Earlier quoted context omitted.

> it requires substantial interpretation of things that the database does not and cannot contain. Do you have examples? This seems like something that is a solvable problem, and from the outside it can seem like it is only about not being willing to switch to a new paradigm. That unwilling ness can come from avoiding real consequences like loosing a competitive edge due to allocation of resources to the switchover.

When people think of automation I'm assuming their thinking of the financial statements (balance sheet, income, cash flows, equity). Reporting also contains narrative explanations by management of: the company's financial health, updates on any new or existing market risks and the company's strategy to deal with them, any changes to controls or accounting procedures, updates on any new or existing litigation, and mor…

I meant just closing the financial records, not coming up with the shareholder marketing. It can take a month just to find out if you "made" the quarter or not, mostly because accounting and finance is combing through every line item to see if they can recategorize it in a way that makes the numbers look better but doesn't result in them going to jail

In what should be a very black and white line of work there is a ton of judgement and negotiation involved

Re: US SEC preparing to scrap quarterly reporting requirement

#454

Post by array_key_first »

jandrewrogers wrote: post #138
fnordpiglet wrote: post #126

Earlier quoted context omitted.

I up you to continuous reporting. Audit should be inherent to the system, not a process after the fact. As a public company all owners should have access to daily closed books, and all companies should be able to close their books daily in 2026. Every six months being the cadence we learn how our companies we own are doing is absurd. It leads to really long dark periods. Also for employees it means we can only divest…

That is an absurd cadence. It is extremely expensive to do this reporting; an an enormous amount of useless activity is slaved to providing it in companies that need to. This is literally a call for more bureaucracy theater. The obvious net effect is that companies would structure themselves to no longer have the reporting requirement, as the cost of reporting exceeds the benefits. That would not benefit society at l…

The argument is that the reason quarterly earnings take so long to report is that they're done quarterly.

If there were done daily, they would take no time at all, and would be close to free.

Re: US SEC preparing to scrap quarterly reporting requirement

#455

Post by anon291 »

bastawhiz wrote: post #357
anon291 wrote: post #289

Earlier quoted context omitted.

Financial illiteracy will be the end of democracy

There's nothing wrong with not retail trading. In fact, most people shouldn't be doing it.

That's the point.

You think some guy at a bank is trading for you.

In a hedge fund sure

Most people are in simple retirement year funds which have a set algorithm which decides by simply rebalancing to follow an index and appropriately mitigating risk by shifting some assets towards bonds.

There is no one trading on a whimsy. The mutual fund founding documents specify an exact time of day (or times) at which the fund gets rebalanced and it simply follows the algorithm..

The price shocks discussed here will not affect that

Re: US SEC preparing to scrap quarterly reporting requirement

#456

Post by kshacker »

kshacker wrote: post #18

This is an awesome move. They’re not saying the reports go away—just moving them to every six months. After hating how each company runs on an internal quarterly cycle, I have to welcome it despite how the change originated. Six months is still short from the perspective of perverse incentives, but if you free up one week of charade from execs every 13 weeks, maybe they can focus better. And it’s not just execs, but…

Reply to myself: This has been one of my more viral comments. Or controversial. Although I am not a karma farming kind, it was funny to see it get rated high, and then pull back more than half way. Yes it is controversial. I guess I was early, having written the same stuff at reddit an hour or 2 before it got posted here. I am not here to argue with anyone, just add a couple of comments.

1. I have heard people complain about quarterly mindset, I have started to believe into it too. Moving to 6 months does not change short term thinking, but it does change at the margins. Gives you breathing space.

2. Just because a pied piper is pushing for the change does not make it bad. At least for me. How it is executed of course will be a concern, but not who is doing it. If I supported this change yesterday, why would I flip now?

3. I am in the SRE world. I see countless people burning midnight oil generating reports ... like why is it important for yesterdays data to be available by 5 AM pacific when by the law of temporal physics, it does not arrive before midnight. 5 hours is all you get why? I know execs may be in NYC, but still ... why is it not a P2? Why is there a fire every day? The same SLA mentality carries over to quarterly reports.

Maybe it is our well engineered just in time inventory mindset. You do not have data by this time, you lose a day here, then someone else loses a day, and pretty soon you need 2 more weeks in your supply chain, or in your financial reporting chain.

4. Yes the daily numbers should roll up into financial reports. But ... we also add all the compliance and make CEO and CFO liable for mis-reporting. Which means they need to look at the numbers, ask questions, get the gaps fixed. And not just them, they will have proxies of accountants doing this work. If you have legal liability, dont we think it costs exec (and subordinate) time? How can we say just roll the database data into financial reports? Has our group of hackers never had a bug or data corruption or system crash?

Re: US SEC preparing to scrap quarterly reporting requirement

#457

Post by sumedh »

jandrewrogers wrote: post #165
clickety_clack wrote: post #156

24/7 trading sounds like a nightmare. “Your retirement savings crashed 30% because there wasn’t enough liquidity to cover a 3am panic over non-news”.

The beauty of it, though, is that it would recover almost immediately as systems arbitrage an obviously stupid situation.

Or the govt steps in and cancels trades like what happened in the flash crash.

Re: US SEC preparing to scrap quarterly reporting requirement

#458

Post by fnordpiglet »

jandrewrogers wrote: post #138
fnordpiglet wrote: post #126

Earlier quoted context omitted.

I up you to continuous reporting. Audit should be inherent to the system, not a process after the fact. As a public company all owners should have access to daily closed books, and all companies should be able to close their books daily in 2026. Every six months being the cadence we learn how our companies we own are doing is absurd. It leads to really long dark periods. Also for employees it means we can only divest…

That is an absurd cadence. It is extremely expensive to do this reporting; an an enormous amount of useless activity is slaved to providing it in companies that need to. This is literally a call for more bureaucracy theater. The obvious net effect is that companies would structure themselves to no longer have the reporting requirement, as the cost of reporting exceeds the benefits. That would not benefit society at l…

It’s only expensive because it happens so episodically that it doesn’t require automation. Automation leads to scale leads to reduction in cost. The analysis humans do on top of it can be done through a periodic filing, but the totality of disclosures can be done continuously other than the periodic human opinion fluff. The notes and details can be filed as they are relevant without undue burden. (I.e., a large onetime expense can be explained as it happens - I assure you it is being explained internally at that time in more detail).

I was at a large Wall Street firm which closed its books daily and has done for decades. They disclose daily to the fed and others. It was work for sure but the benefits of constantly knowing your business far out weighed the cost. So I don’t buy that it turns into more theater, you can’t do theater at a continuous pace. Theatre takes time, and the level of theatre increases as the pace of disclosure decreases.

Re: US SEC preparing to scrap quarterly reporting requirement

#459

Post by fnordpiglet »

testrun wrote: post #247
fnordpiglet wrote: post #126

Earlier quoted context omitted.

I up you to continuous reporting. Audit should be inherent to the system, not a process after the fact. As a public company all owners should have access to daily closed books, and all companies should be able to close their books daily in 2026. Every six months being the cadence we learn how our companies we own are doing is absurd. It leads to really long dark periods. Also for employees it means we can only divest…

You don't have all the relevant invoices etc at on time. Some of that takes quite awhile. Especially inter country purchases and sale transaction information.

This doesn’t get better when you have a quarterly or semiannual deadline. It’s just the scale might be smaller. However you would handle them in the same way and either disclose on an accrual basis or on a cash basis, but either way, you do it as you know it.
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