The Footnotes Analyst exists to help investors understand how financial reporting affects investment analysis and valuation.
It is not an accounting publication, although accounting is often the starting point. Nor is it a valuation publication in the traditional sense, although valuation and analysis form the framework through which every accounting issue is assessed. The objective is to bridge the gap between accounting standards and investment analysis.
Most accounting publications explain how transactions should be reported. Most investment publications assume that reported numbers can be used without modification. The Footnotes Analyst occupies the space between the two. It asks whether financial reporting faithfully represents economic reality and, where it does not, how investors should respond.
The Footnotes Analyst is primarily written for readers who already have an understanding of finance and accounting, and who are interested in improving investment decisions, not in merely learning accounting rules. Typical readers include buy-side analysts, portfolio managers, equity research and valuation specialists, standard setters and regulators, accounting professionals with an investment focus, academics, and experienced private investors.
The articles are written by friends and former colleagues Steve Cooper and Dennis Jullens. We both worked at UBS Investment Research, where we advised UBS analysts and institutional investor clients on equity analysis, equity valuation and financial reporting. When Steve left UBS to join the International Accounting Standards Board in 2007, we said that one day we would publish our ideas ourselves. It took us some time to get round to it, although we might have done it sooner had Steve, after his retirement from the IASB in 2017, not spent some time trying, and largely failing, to reduce his golf handicap.
We chose the name Footnotes Analyst because that is usually where the real information sits. The numbers on the face of the income statement or balance sheet rarely tell the full story, and the detail that may actually change an investment view is often a few pages further on.
Since 2019 we have used the blog to comment on new accounting developments, valuation questions and, from time to time, live market issues, such as how AI infrastructure spending and customer financing arrangements affect free cash flow. Where relevant we submit our own comment letters to the IASB and FASB, which you will find alongside the related articles. Many articles come with a free downloadable model, from DCF and residual income templates to tools for analysing beta, leverage and target multiples. Our body of work now comprises over 100 articles and, currently, 28 analytical models.
Despite our careers sometimes taking us along different paths we have, in one way or another, both spent most of our working lives involved in financial reporting and equity analysis, and remain as interested in these topics now as when we started.
Steve Cooper
Steve was a board member of the International Accounting Standards Board from 2007 to 2017. The IASB is the body that sets IFRS. Before that, Steve was a Managing Director at UBS, where he spent 11 years as head of the Valuation and Accounting Research team and was rated the top European valuation and accounting analyst in the Extel and Institutional Investor surveys for ten consecutive years.
Steve’s earlier career includes education and training, auditing and corporate finance. He is now retired but enjoys sharing his interest in financial reporting and equity valuation through this blog. More on LinkedIn …
Dennis Jullens
Dennis teaches financial accounting, equity analysis and equity valuation at several business schools across Europe including Rotterdam School of Management, WHU Otto Beisheim School of Management (Vallendar – Germany), Luiss Business School and Amsterdam Business School. He moved to academia in 2012 after 12 years in equity research at UBS, mostly in the Valuation and Accounting Research team.
Dennis has also been involved in accounting standard setting and was formerly a member of the Financial Reporting Technical Experts Group at EFRAG, which supports the European Commission. His earlier career includes various other roles in investment banking. More on LinkedIn …
Please be aware we do not provide investment advice.