US President Donald Trump has urged American companies to stop the practice of filing quarterly earnings report, and instead suggested that they should report results only twice a year.
Currently, all listed US companies must submit both quarterly (10-Q) and annual (10-K) reports to the Securities and Exchange Commission (SEC). Trump argued that moving to a six-month reporting system, if approved by the SEC, would ease the burden on businesses.
“Subject to SEC approval, companies and corporations should no longer be forced to ‘Report’ on a quarterly basis (Quarterly Reporting!), but rather to report on a ‘Six (6) Month Basis,’” Trump wrote on Truth Social.
He also noted that while China often plans company strategies with a vision spanning decades, American businesses are too focused on short-term quarterly results, which he believes is harmful.
“Did you ever hear the statement that, ‘China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis??? Not good!!!” he said.
Why is the suggestion coming now?
Some companies have recently raised the same demand. According to a report by the CBS News, The Long Term Stock Exchange, announced last week that it will ask the SEC to remove the rule that requires quarterly reports. The San Francisco-based exchange works with companies that focus on long-term goals. Its founder, Eric Ries, has often said that financial markets pressure businesses to chase short-term gains instead of building for the future.
Trump’s proposal also fits with his administration’s wider effort to simplify the regulatory burden for companies, the report added. The idea is that fewer regulations will lower costs for businesses and, in turn, boost economic growth.
What’s the debate over quarterly reporting?
Those who support the suggestion argue that quarterly reporting is expensive and takes up too much time. They believe it also discourages companies from going public. According to them, frequent reporting makes executives focus on short-term profits instead of planning for long-term growth, reported CBS.
On the other hand, those in favor of quarterly reports say they give investors regular updates about a company’s financial health. They warn that switching to six-month reports would leave investors with less information and make it harder to spot potential risks early.