Article by Jan Bouwens published in Financial Times
Jan Bouwens, Professor of Accounting at Amsterdam Business School, recently had an article published in the Financial Times. The article, 'Abandoning quarterly reporting would increase the cost of capital', explores the consequences of US President Donald Trump’s call for quarterly earnings in the US to be replaced by a six-month system.
Bouwens argues that such a move would mean investors would have to wait to learn how well a company is performing, something Bouwens refers to as ‘information asymmetry’. This in turn would lead to an increase in the cost of capital. Bouwens concludes that information asymmetry needs to be reduced because this “translates into a lower cost of capital, making investments viable that would be lost otherwise.”
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