ArgonProconsulting

training

1

Case Daimler-Benz - Old, but still valid example

ArgonProconsulting

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) 615Deferred Taxes 2.627Other Changes 292Long-term Projects 78Change in AppropriatedRetained Earnings -4.262Pension Liabilities -624Goodwill and Acquisitions -287Currency Derivatives -225Currency Conversion -40Minority Shares -13Loss (US GAAP) -1.839Works still today in IFRS

and US GAAP environment! Both results are correct!

@TimoNurminiemi

http://www.linkedin.com/in/timonurminiemi

ArgonProconsulting

training

@TimoNurminiemi

http://www.linkedin.com/in/timonurminiemi

@TimoNurminiemi

http://www.linkedin.com/in/timonurminiemi

e-mail: timo.nurminiemi@kolumbus.fi