FEI Seeks to Answer the Question: What Do Users of Private Company Financial Statements Want?

Search Blogs that Mention this News Release

Click this link to view linked Bookmarking Services

Click this link to view linked Blogging Services

FEI Seeks to Answer the Question: What Do Users of Private Company Financial Statements Want?

       Issues New Report Based on Perspectives of Users and Preparers

    FLORHAM PARK, N.J., June 2 /PRNewswire/ -- The users of private company
financial statements are looking for accuracy, comparability and more
information, according to a new report released today by Financial
Executives Research Foundation (FERF), the research affiliate of Financial
Executives International (FEI). The first in their "Private Company"
research series, the report, entitled "What Do Users of Private Company
Financial Statements Want?", summarizes interviews with preparers of
financial statements and commercial and investment bankers and serves to
examine the needs of both users and preparers.
    "Most financial executives would agree that serving the needs of the
users of financial statements is one of the primary objectives of financial
reporting," said Colleen Cunningham, President and CEO of FEI and FERF.
"With this report we aimed to identify the specific needs of those users of
private company financial statements. We are excited to be issuing this
insightful and practical information as part of our private company
research series."
    The following highlights some of the themes which emerged from the
interviews, and are further developed in the report:
    Bankers
     * Banks want annual audited GAAP financial statements for accuracy and
       comparability, and they also want quarterly financial statements.

    Investment Bankers
     * Want audited annual GAAP financial statements for accuracy and
       comparability.
     * Want supplemental information beyond GAAP, such as a history of capital
       expenditures.
     * A fair value appraisal will be required if a company is not liquid.
       This is not necessary for a financially strong company.

    Investors
     * Are more interested in operating data than financial data.
     * Consider trend lines and year-over-year comparisons to be important.

    Use of GAAP
     * Certain calculations are difficult and time consuming (Ex. FIN 46)

    Debt Covenants
     * EBITDA, as a proxy for cash earnings, is very important to banks.
       Financial statements should segregate depreciation and amortization so
       that they can be added back to net income to calculate EBITDA.

    Internal Controls
     * The only users that have requested compliance with Sarbanes-Oxley are
       investment bankers, in anticipation of a sale of a company or an
       initial public offering (IPO).
    The report is free to members and can be purchased online and at:
http://www.fei.org/rfbookstore/.
    About FEI
    Financial Executives International (FEI) is the leading advocate for
the views of corporate financial management. Its 15,000 members hold
policy-making positions as chief financial officers, treasurers and
controllers. FEI enhances member professional development through peer
networking, career management services, conferences, teleconferences and
publications. Members participate in the activities of 85 chapters, 74 in
the U.S., 11 in Canada.
    Financial Executives Research Foundation (FERF) is the non-profit
501(c) (3) research affiliate of FEI. FERF researchers identify key
financial issues and develop impartial, timely research reports for FEI
members and non-members alike, in a variety of publication formats.

SOURCE Financial Executives International

http://www.fei.org

http://www.fei.org/rfbookstore

http://www.prnewswire.com/comp/310650.html /
CONTACT:
Kristen Crofoot of Financial Dynamics,
+1-212-850-5692, kcrofoot@fd-us.com, for Financial Executives
International