Accounting shifts muddy reported profits
This reporting season for the June 2005 year may be a confusing one for some investors. About a third of companies will report for the first time using the new International Financial Reporting Standards. Companies will report results to the new rules, and restate prior results. They will also have to show their latest profit or loss under the old accounting standard. Companies will no longer expense goodwill, which will increase profit, but expense shares options, which will cut profit.