09.09.2019 - Studies
The DAX companies do not use the leeway in accounting for provisions for accounting purposes. Thus, there is only a weak correlation between the development of provisions and the earnings situation.
Management estimates at various points play a major role in the recognition and measurement of provisions. To a certain extent, these discretionary powers can be used by management to influence the reported results. Assuming that management has an interest in minimizing fluctuations in earnings, it is possible to build up hidden reserves in economically good years, which are released again in weak years. This would smoothen the reported results.
As the analysis based on the DAX companies for the years 2007 to 2018 shows, there is no significant correlation between the earnings situation and the allocation or reversal of provisions.
Please note: This study is available in German only.
08.08.2019 - Companies
by Kai LehmannPension burdens of the DAX groups are likely to have climbed to a record high of over 400 billion euros in the first half of the year. Erosive interest rates have caused pension agreements to swell massively.
16.05.2019 - Companies
by Kai LehmannThe debt burden that many DAX companies are weighing on due to their pension promises remains high. As this article shows, the financial strength of some corporations is likely to suffer for many years from the pension deficits to be closed.
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