Second, main parameters of thermodynamic analysis and economic analysis are based on the National Standards of Chinese Industry and the realistic financial and cost estimating assumptions in China.
The SEC's guidance around the use of reasonable estimates, assumptions as well as methodologies and statistical sampling centers on the concept of reasonableness.
In an investor context, the relative flexibility around pay ratio estimates, assumptions and methodologies granted by the SEC may be a double-edged sword.
This new guidance provides important flexibility and direction for issuers around the types of estimates, assumptions sampling and methodologies that can be used to implement the disclosure.
The SEC's new guidance on pay ratio disclosure focuses on three central elements: (1) the use of reasonable estimates, assumptions, and methodologies and statistical sampling; (2) the use of internal records; and (3) the treatment of independent contractors.
The development of Option 4 or realistic approach involves the adoption of best estimate computer codes, best estimate assumptions on systems availability and best estimate of initial and boundary conditions for the safety analysis.
While the new guidelines provide a helpful measure of administrative relief to companies dealing with the complexity, costs, and burdens of the new calculation, it may also increase scrutiny from certain investors on the estimates, assumptions, and methodologies that companies use to create its pay ratio disclosure.
Certain investors, particularly public pension funds and labor-backed asset owners, are likely to be wary of companies that provide unclear disclosure, include different elements in the pay ratio calculation than in other compensation-related disclosures, or rely on estimates, assumptions, or methodologies that are not explained in detail.
Treadgold goes on to say that these numbers are, of course, contingent on "estimates, assumptions, forecasts and predictions". And yes, $100 billion does sound exceptionally high.
Now, I should say, in defense of my profession, again, that the actuaries did their jobs properly in calculating the plans' liabilities based on best-estimate assumptions.
Even though financial statements purport to address their needs, because the statements, which are prepared by the firm's managers, conceal a range of managerial estimates, assumptions, judgments, and choices, investors are deprived of the most fundamental kernel of information they seek, namely the overall quality of the financial reports themselves.
