Leaders In Financial Reporting Recognized At Lubin School Of Business' 2nd Annual Pacesetters In Financial Reporting Conference

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The Lubin School of Business at Pace University held its 2nd annual Pacesetters in Financial Reporting Conference today, designed to acknowledge companies that are striving to better meet the needs of today’s investors and to encourage ongoing enhancements in corporate reporting. The conference was hosted by Pace’s Center for Excellence in Financial Reporting, in association with Financial Executives International (FEI) and EY.

Microsoft Recognized as 2017 Pacesetter in Financial Reporting

The Lubin School of Business at Pace University held its 2nd annual Pacesetters in Financial Reporting Conference today, designed to acknowledge companies that are striving to better meet the needs of today’s investors and to encourage ongoing enhancements in corporate reporting. The conference was hosted by Pace’s Center for Excellence in Financial Reporting, in association with Financial Executives International (FEI) and EY.    

Microsoft was named the 2017 Pacesetter in Financial Reporting, in recognition of its leadership in early adopting the new revenue recognition and leasing accounting standards, as well as their proactive approach to educating investors and sharing insights with others. Most public companies are required to adopt the new revenue recognition standard in 2018 and the new leasing standard in 2019.

“U.S. companies are poised to adopt several significant changes in accounting in the next few years, starting with the new revenue standard in 2018,” said Leslie F. Seidman, Executive Director of the Pace Center for Excellence in Financial Reporting and former Chairman of the Financial Accounting Standards Board (FASB). “Today, we learned from the real-world experience of early-adopter Microsoft, with emphasis on how they educated analysts and investors about the effects of the new revenue standard on their financials. The CFA Institute also shared some tips about how to communicate effectively with investors during this period of change.”

“Microsoft adopted the new revenue and leasing standards early to simplify communication of our results by providing one set of restated financial statements to investors and eliminating the need for non-GAAP revenue reporting,” said Frank Brod, Chief Accounting Officer at Microsoft. “The upfront education that we provided our analyst and investor community resulted in a smooth transition to the new standards in the first quarter of our fiscal year 2018. We are honored to be recognized for this work.”

FEI’s Accounting Policy Group shared the results of their updated analysis of corporate disclosures related to the anticipated impact of the change in revenue recognition guidance. The three quarter 2017 trend information shows that companies are continuing to expand their disclosure of the anticipated impact of adopting the new revenue standard. However, as of Q3 2017, only 14% of the Fortune 500 had quantified this impact in their disclosures, and over half of those companies disclosed that the anticipated impact would be immaterial to their financial statements. The complete Professional Accounting Update, which includes insights by industry, is available at http://www.financialexecutives.org/2017RevRecDisclosures.

In recent years, the U.S. Securities and Exchange Commission (SEC) and the FASB have undertaken Disclosure Effectiveness initiatives, and have been reconsidering existing requirements, such as Regulation S-K and S-X. At the same time, SEC officials and others have encouraged companies to enhance their financial reports, with particular focus on risk disclosures. “Risk factors are often criticized as being generic and boilerplate,” said Jonathan Nus, Executive Director, EY, who shared a recent EY study on risk disclosures. “However, a growing number of companies are taking a more insightful and innovative approach in disclosing their risks. This has become increasingly more pertinent as emerging risks such as cybersecurity remain front and center.” The report is available at http://www.EY.com/disclosures.

Chris Taylor, VP of Listings and Services at the New York Stock Exchange (NYSE), provided commentary about the state of the markets and the importance of transparent and accessible information. “There is a renewed sense of optimism in the capital markets as more companies from around the world turn to the U.S. to IPO,” said Chris Taylor, VP of Listings and Services at NYSE. “We are advocating on behalf of private and public companies in support of improved disclosure standards and increased accessibility of relevant data to investors, which will ease the path to going public, while also increasing transparency to make investor relations a less daunting task for public companies.”

“Today, we heard from a number of industry leaders who have taken the initiative to enhance their financial reports by focusing on the simplification of disclosures and on critical information such as the anticipated effects of accounting change. These companies recognize the importance of telling their story as effectively as possible to inform shareholders and the investor community,” said Andrej Suskavcevic, CAE, President and CEO of FEI. “FEI will continue to support, analyze and share information to further this important initiative.”
The complete list of sessions and speakers were:

Learning from the Leaders: How to Prepare Your Investors for the New Revenue Standard
Moderator: Patrick Finnegan, Senior Director, Fitch Ratings; former Member, International Accounting Standards Board
Panelists:
Kristin Chester, Senior Manager, Investor Relations, Microsoft
Stacy Harrington, Senior Director, Corporate Revenue Assurance, Microsoft
Sandra Peters, Head, Financial Reporting Policy Group, CFA Institute

At the Risk of Full Disclosure: How to Enhance Your Disclosures About Risk
Moderator: Keith F. Higgins, Chair, Securities & Governance Practice, Ropes & Gray, former Director, SEC Division of Corporation Finance
Panelists:
Sam Eldessouky, SVP and Corporate Controller, Valeant Pharmaceuticals
Mary Morris, Investment Officer, CalSTRS
Jonathan Nus, Executive Director, EY
Lori Zyskowski, Partner, Gibson and Dunn

Demystifying the Investment Process: How Investors (and Others) are Analyzing Your Data
Moderator: Leslie F. Seidman, Executive Director, Center for Excellence in Financial Reporting, Pace University Lubin School of Business
Panelists:
Javed Jussa, Quantitative Strategist, Wolfe Research    
Mike Willis, Assistant Director, SEC Office of Structured Data, Division of Economic and Risk Analysis

A Candid Exchange about Financial Communication with NYSE
Moderator: Mark Besca, NYC Managing Partner, EY, Chairman of Board of Trustees, Pace University
Speaker: Chris Taylor, Vice President, Listings and Services, NYSE
For more information, please visit http://www.financialexecutives.org/PIFR2017 or http://www.pace.edu/lubin/cefr

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About the Lubin School of Business at Pace University:
Globally recognized and prestigiously accredited, the Lubin School of Business integrates New York City’s business world into the experienced-based education of its students at Pace’s suburban and downtown campuses, implemented by the region’s largest co-op program, team-based learning, and customized career guidance. Its programs are designed to launch success-oriented graduates toward upwardly mobile careers. http://www.pace.edu/lubin

About Financial Executives International:
Financial Executives International (FEI) is the leading organization representing the views of corporate financial management. Its more than 10,000 members hold policy-making positions as chief financial officers, treasurers and controllers at companies from every major industry. FEI enhances member professional development through peer networking, career management services, conferences, research and publications. Members participate in the activities of more than 65 chapters in the U.S. and a chapter in Japan. FEI is located in Morristown, NJ. Visit http://www.financialexecutives.org for more information.

About EY:
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

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Cara Cea
Pace University
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