A buy-and-hold investor has read a magazine article that suggests some companies use accounting tricks in reporting on their employee future benefits. As a result, it is difficult for investors to receive an accurate picture of a company's financial performance. One of the companies mentioned is Imperial Oil Limited, a company in which the investor holds shares. He decides to review the company's most recent annual report, analyzing how it accounts for its future employee obligations of more that $3 billion. He needs to evaluate the management decisions regarding the measurement and disclosure of these obligations, assess the economic impact on the company's performance and consider the potential impact on his investments. Finally, he needs to reassess his own buy-and-hold strategy.
