085 Earnings forecast becomes unobligated for listed companies
“Report on the disclosure of earnings forecast of listed companies” announced on July 29 2011 by Tokyo Stock Exchange reports that earnings forecast should be voluntarily disclosed. And also, it says that they do not ask for any reason of why earnings forecast is not disclosed.
Most companies disclose earnings forecast in the brief report of financial statements. It is a burden that they have to disclose adjusted earnings forecast every time it becomes highly possible that formerly disclosed earnings forecast could differ from the newly estimated earnings forecast.
On the other hand, investors use the forecast to make their investing decisions and companies could see in number how they will grow in a year.
Earnings forecasts are considered as one of the communication tools between companies and investors. Therefore, balance between cost and benefit should be taken into account by listed companies.
