Moody’s Pans Supply Chain Finance Accounting Proposal (1)

An accounting proposal forcing companies to own up to using popular—and largely hidden—debt-like arrangements to flatter their finances falls short of investor demands, Moody’s Investors Service said Thursday.

While the Financial Accounting Standards Board’s plan would help zero in on the companies that use supply chain financing, without information about the original invoices put into the programs, unraveling the economic impact “will be entirely speculative,” the credit rating agency said in a report .

The details matter, Moody’s said, and FASB’s proposal requires too few. The proposal allows companies to decide which key terms to disclose, “opening the door for …

Leave a Comment