"For more than 50 years, quarterly reporting has been the metronome of U.S. financial markets. Like daylight savings or Thanksgiving arguments, it is baked into our economic rhythm. Every three months, public companies must bare their financial souls to investors, analysts, competitors and journalists hungry to scrutinize margins and future guidance. But now, an old idea has resurfaced: ditch quarterly earnings and move to semiannual disclosures. At first glance, the proposal sounds reasonable."
"President Donald Trump recently resurrected the idea, echoing earlier musings from his first term. "This will save money and allow managers to focus on properly running their companies." But before tossing 10-Qs into a regulatory recycling bin, we should ask: What exactly are we saving and what might we be losing? Disclosure costs - or price of admission? There is no denying quarterly reporting is time-consuming, frustrating and expensive."
Quarterly reporting has structured U.S. markets for decades, requiring companies to disclose financial results every three months and exposing margins and guidance to scrutiny. Proposals to replace quarterly reports with semiannual disclosures aim to reduce compliance burdens and let managers focus on operations. Compliance costs can total hundreds of thousands to millions, covering accounting, legal, communications and investor relations. Executives spend earnings season preparing for analyst questioning and managing market reactions, creating performative reporting rituals. Some firms use automation or AI to handle repetitive tasks. The trade-offs between cost savings and information loss or market transparency remain uncertain.
Read at Fortune
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