Introduction

Welcome to our report giving investors the scoop on what’s happening at the FASB and IASB and how it affects fundamental analysis.

The goal of this publication is to provide investors with a one-stop shop for research on how changes in accounting standards affect investing.

We will focus on rule changes that affect financial statements and how investors analyze fundamentals.

Note from the CEO

During my tenure on FASB’s Investor Advisory Committee, I experienced first-hand how difficult it is to keep up with what the FASB does. There’s lots of noise and lots of complexity.

The goal of this publication is to cut through that noise and give on-the-ground investors clear insights into what matters when it comes to accounting rule changes.

Importantly, we will focus on how the FASB affects or changes what investors need to do to understand the economics, not just accounting, of business performance and valuation. We view accounting data and results as just the first step in the assessment of corporate performance. The more important steps involve gathering all accounting data, especially footnotes, and organizing it according to its economic consequence.

This kind of work is our specialty. We’ve been doing it for over 20 years, and we’ve developed proprietary technology to help us do it better.

I won’t say that you’re going to like accounting after reading our research, but there is a very good chance that you won't hate it as much.

David Trainer, CEO and Founder

Key Stats

• • Through September 17, 2019, we parsed 9,432 10-Ks and 10-Qs and collected 672,316 data points.
  • In 3Q19 alone (through 9/17/19), we parsed a total of 3,121 10-Ks and 10-Qs and collected 184,151 data points.
  • In 2019, through 9/17/19, we’ve used these data points to make a total of:
    • 27,143 income statement adjustments with a total value of $1.9 trillion
    • 28,416 balance sheet adjustments with a total value of $13.5 trillion
    • 11,459 valuation adjustments with a total value of $15.3 trillion

Our “Robo-Analyst” technology, featured by Harvard Business School (HBS) in “Disrupting Fundamental Analysis with Robo-Analysts”, enables us to perform diligence at a previously impossible scale. In fact, new research from HBS & MIT Sloan, “Core Earnings: New Data and Evidence” uses our “novel dataset” to show that (1) markets are inefficiently assessing earnings because too few investors analyze footnotes, (2) corporate managers exploit this oversight to manage earnings and (3) our technology gives investors access to important footnotes data for the first time ever.

We believe every investor deserves access to the same sophisticated fundamental research used by Wall Street insiders.

Maybe fundamental research is not 100% of your investment decision, but it should not be 0%.

Check out our Earnings Distortion Scorecard to see how the stocks in your portfolio stack up.