Accounting & Tax

Nokia Defends Reporting Style Despite Contrasts

The telecom firm showed large discrepancies between its pro forma and IAS second quarter figures.
CFO.com StaffJuly 19, 2001

Nokia on Thursday defended its earnings reporting style as the most accurate possible in spite of large discrepancies between its pro forma and International Accounting Standards (IAS) second quarter figures, reports Reuters.

The telecoms equipment maker at the start of 2001 began reporting pro forma figures, which excluded goodwill charges from acquisitions, changes in the company’s structure due to acquisitions or divestments and other non-recurring items.

At the time, Nokia said the move would “increase transparency and provide more meaningful information to investors”, and spokeswoman Maija Tommila told Reuters the method gave a better view of the company’s current state.

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Some critics say that pro forma accounts can be misleading to investors by accentuating the positive and minimizing the negative in a company’s performance.

In Nokia’s case, the discrepancy in the pro forma and IAS numbers is significant.

Read full story at Yahoo.com.