2. ArgonPro
consulting
training
2
Correct result?
• Example - Daimler-Benz AG
1993
• Listing plans to NYSE
– Conversion from German
accounting rules into US GAAP
– Traditional accounting based
profit is not correlated with
shareholder returns and can
easily be manipulated
”Cash is a fact,
profit is an opinion”
Source: Aeppel, Timothy, “Daimler-Benz Discloses Hidden Reserves of $2.45 Billion, Seeks Board
Listing”, Wall Street Journal (25 March 1993): A10
2.454 $M
MUSD
Profit (HGB) 615
Deferred Taxes 2.627
Other Changes 292
Long-term Projects 78
Change in Appropriated
Retained Earnings -4.262
Pension Liabilities -624
Goodwill and Acquisitions -287
Currency Derivatives -225
Currency Conversion -40
Minority Shares -13
Loss (US GAAP) -1.839
Works still today in IFRS
and US GAAP environment! Both results are
correct!