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This post was written by Minyanville contributor Minyan Peter.This morning UBS (NYSE: UBS) reported that it was amending its 2008 financial statements to increase the prior period loss by another Sf 1.1 billion.
I would remind readers that Citigroup (NYSE: C) did the same thing at the end February when it "booked" an incremental $9.6 billion charge for goodwill impairment in its 2008 results. And there have been several other situations where, with hindsight, financial institutions have adjusted their 2008 results lower (versus their initial earnings releases) prior to filing their 10-K's with the SEC.
While not suggesting a right or wrong/good or bad, I would offer that there are now billions of dollars of losses which were forecast by analysts to occur in 2009 which have been recorded post-earnings season into 2008. And as a result of these charges, investment analysts whose 2009 earnings projections are having to make adjustments to their forecasts trying to determine what were run rate losses that they anticipated and what were special "one-time charges."
In any case, I would be very cautious when you hear executives talking about "beating expectations" and ask yourself two important questions - "Including or excluding what?" And "Expectations as of when?"
As I have offered previously, generally speaking, our accounting system does not change the amount of loss to be determined, but rather the timing of the loss. With losses moving back and forth between current and prior periods with increasing frequency, transparency can quickly become opaque.
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