Magazine article Global Finance

The Case for US GAAP

Magazine article Global Finance

The Case for US GAAP

Article excerpt

Benckiser's initial public offering of stock on November 24 came 174 years after the company was established in Germany in 1823. However, we believe that our 19th-century company has gone public in a very 21st-century way: Benckiser, headquartered in Amsterdam, chose to list its stock on both the New York Stock Exchange and the Amsterdam Stock Exchange, and we have begun publishing financial statements drawn up according to US generally accepted accounting principles (GAAP). These steps say as much about the evolving global financial marketplace as they do about Benckiser.

While listing in New York as well as Amsterdam gives our company greater exposure to international investors, we believe providing statements prepared on the basis of US GAAP is an equally critical step in expanding our access to international investors.

US accounting standards are widely regarded as the most informative in the world. In contrast to German standards, for example, US GAAP requires detailed cash flow statements and discourages building accruals and reserves in order to smooth actual results. Moreover, the management discussion and analysis that accompanies US financial statements is more comprehensive and informative, and the segment information is also more complete.

We don't single out German standards for criticism. In fact, US GAAP provides more overall information than the national standards in virtually every other country, and US standards are also more informative than the International Accounting Standards that many European companies have been adopting. …

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