Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )

thanitistoanyotherpartofGE.Consequently,firms

havetogotogreatlengthstoseparatethefinancial

obligations and dealings ofthese subsidiariesfrom

the rest of the firm to make the statements

meaningful.

• Acquisitive firms tend to have longer financial
  statements than firms that grow through internal
  projects.Theaccountingforanacquisitionnotonlyis
  morecomplicated(withgoodwillandpurchaseprice
  allocationacrossassets)intheyearoftheacquisition
  but it also continues to have ripple effects in the
  following years (as goodwill gets amortized or
  impaired).


• Firms that operate in multiple businesses and
  multiple countries tend to have longer financial
  statements than single-business companies that
  operateonlyindomesticmarkets.Again,wearenot
  suggesting that diversification across countries and
  businessesisbad,butratherthatthismaybeoneof
  thecoststhathastobeweighedagainstthepotential
  benefits of such diversification.

TABLE 16.1 Complexity in Financial Statements: U.S.
Companies

Company

Number of Pages in

Last 10-Q

Number of Pages in

Last 10-K

General

Electric

65 410

Microsoft 63 218

Wal-Mart 38 244

ExxonMobil 86 332