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Pandemic-Related EBITDA Adjustments: How Should CFOs Weigh Them?

The financial challenges triggered by the pandemic have prompted CFOs to reassess the necessity of EBITDA adjustments. Data shows that the adjustment magnitude fell from 24.4% in Q4 2019 to 21.8% in the same period of 2020, with only 1.6% directly related to the pandemic. The article analyzes company-specific methods, selection of value drivers, and introduces three strategies—annualized earnings, 2021 EBITDA, and month substitution—emphasizing the importance of defensible metrics.

Opinion
Record IT Spending in 2021: Three Mistakes CFOs Should Avoid

Global IT spending in 2021 is expected to grow 6.2% to $3.92 trillion, and CFOs need to accelerate digital transformation while being wary of three major mistakes: underestimating transformation complexity, vendor contract proliferation, and neglecting change management. Experts recommend improving success rates through strategic alignment, total cost of ownership analysis, and enhanced communication.

Deep Dive
GAAP is Outdated: Talent Should Be Treated as a True Asset

Marvin Weiss, a retired accounting professor, points out that GAAP, rooted in the production-driven era, does not treat talent investments as assets, leading to undervaluation of knowledge-based companies. He suggests capitalizing human resource expenditures and amortizing them over expected service years to address the confusion caused by non-GAAP metrics.

Opinion
Lawyers expect SEC to intensify oversight of financial reporting

Lawyers anticipate that under the Biden administration, the U.S. Securities and Exchange Commission (SEC) will strengthen scrutiny of corporate financial disclosures and internal control processes, focusing on pandemic-related reports, ESG performance, and SPAC transactions.

Deep Dive
Biden's Tax and Regulatory Plans May Drive Up M&A Deal Costs

M&A activity has shown signs of recovery after a prolonged pandemic-induced lull and may reach a peak in 2021. The Biden administration's proposed tax and regulatory reforms, including raising corporate tax rates and capital gains taxes, could increase deal costs, prompting sellers to seek higher valuations. Analysts believe that 2021 is a window period to complete deals before new regulations take effect.

Deep Dive
Four Strategies for Chief Financial Officers to Reduce Cloud Spending Waste

Cloud computing helped enterprises reduce fixed costs and enable remote work during the pandemic, but many CFOs have found significant waste in cloud spending, with typical enterprises wasting up to 35%. This article interviews experts from Protiviti, Ensono, CloudCheckr, and other organizations, proposing four strategies—tag-based budgeting, establishing a cloud center of excellence, mastering cloud concepts, and incentivizing employees to identify waste—to help financial executives balance innovation and financial control.

Deep Dive
2021 Outlook: Why and How CFOs Should Lead ESG Efforts

In 2021, CFOs must address the growing scrutiny of ESG metrics from investors, regulators, and the public. Several financial executives and experts point out that CFOs should act as the "chief cheerleaders" for ESG, integrating it into corporate strategy through systematic reporting mechanisms, a focus on long-term planning, and driving cultural change, thereby reducing the cost of capital, enhancing reputation, and mitigating regulatory risks.

Deep Dive
Five Trends Chief Financial Officers Need to Focus on in 2021

As the pandemic response enters a new phase, CFOs in 2021 need to refocus on five key trends—ESG disclosure, the LIBOR transition, digital budgeting tools, real-time data capabilities, and hybrid work models—to navigate uncertainty and seize growth opportunities.

Deep Dive
CFOs Should Carefully Consider Tax and Legal Risks Before Closing Offices

The pandemic offers cost-conscious CFOs an opportunity to save expenses, but closing offices may be short-sighted. HR strategy may trigger unexpected tax and legal risks, especially when employees can work remotely. CFOs and CHROs need to coordinate on office space, remote policies, and the relationship between compensation and location.

Opinion
The Art of Remote M&A: Using Long-Form Writing to Compensate for the Shortcomings of 'Zoom-Style Deals'

In the era of remote work, tools like Zoom are convenient but struggle to support the deep communication required for M&A negotiations. UserTesting Chief Strategy Officer Mona Sabet, drawing on her company's practical experience acquiring a Norwegian tech firm, proposes replacing bullet-point communication with long-form writing. By leveraging collaborative platforms like Google Docs, teams can achieve more comprehensive understanding and alignment in virtual environments, thereby improving the success rate of remote M&A.

Opinion

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