From Siebe to Tate & Lyle, from National Power to BAT Industries, virtually every company that has responded to the ASB's draft standard has been violently opposed to it. A positive orgy of criticism has greeted the suggestion that the costs of reorganising and rationalising a business following its acquisition should be charged against future profits, rather than hidden away as pre-acquisition adjustments.
Their argument goes like this. No sensible company would countenance launching a bid without calculating the costs of integration. Since such costs are a key factor in determining the purchase price, they should legitimately be treated as part of it. And in any case, shareholders would not have a clue what was going on unless the figures were tied up for them.
Perhaps they should talk to their shareholders. For the latter find the current situation - which makes even the most ill-judged acquisition look miraculously successful for at least the first couple of years - incomprehensible. Not surprisingly, they are almost unanimously in favour of the ASB's determination to force companies to come clean.
So far, the ASB has proved satisfyingly immune to corporate criticism of its proposals. So, come the final standard in the autumn, hopefully companies will find they spend more time explaining the effects of their acquisitions, and less time working out how to conceal them.Reuse content