The questions for discussion address the differences between management and analysts in their preferred earnings patterns, the impact of goodwill accounting on earnings quality, the background and rationale for the earnings adjustments the analyst made, and whether cash flow accounting would solve the problem. The main findings are that the three distinctive elements of earnings quality do not consistently point to one of the accounting methods as the most favored. Based on the importance of predictability of earnings for financial analysts, it is a bit surprising that the analyst favors the less predictable method. In this particular case, the cash flows in the cash flow statement do not depend on the method applied. However, it can be questioned whether cash flows are more relevant than earnings for the evaluation of the investment in CCH.

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