Reconsidering the Concept of Quarterly Reporting

May 5, 2016

Included in the SEC’s concept release on Regulation S-K disclosure is an inquiry into the value of quarterly reporting and whether quarterly reports should be discontinued or made voluntary for U.S. public companies. According to the SEC, “Opponents of quarterly reporting argue that frequent financial reporting may lead management to focus on short-term results to meet or beat earnings targets rather than on long-term strategies.” The SEC adopted semi-annual reporting requirements in 1955 and quarterly reporting requirements in 1970. It seems unlikely that investors would favor the elimination of quarterly reporting, and the SEC noted a survey indicating that 58 percent of investors want quarterly information to confirm or reframe expectations. However, some notable investors, including Warren Buffett, have challenged whether this information is as meaningful as investors make it out to be. Read Warren Buffet’s take on issues with quarterly numbers and our previous discussion of BlackRock’s distaste for “the culture of quarterly earnings hysteria.”

View All Ticker Posts