I’ve mentioned it in passing a few times, but there is a pregnant person in my house. Very soon, she will no longer be pregnant, and when that happens, this newsletter will go on a four-week hiatus. Do whatever you have to do to prepare yourselves. Ok? Ok. And now, back to this week’s regularly scheduled newsletter.

Dress codes

Several years ago, I was consumed by the news of accounting firms embracing denim as the cornerstone of their dress codes. It was not without controversy at the time, but in subsequent years, many firms seemed to have succumbed to a more casual dress code. At the very least, firms recognized that their clients had varying expectations and that business casual—and certainly business professional—wasn’t always appropriate.

We’ve talked a few times about the fact that, here in the COVID era, dress codes have become increasingly irrelevant, subject to interpretation, or done away with altogether (especially from the waist down). And given the circumstances, most people are fine with it.

The question remains, though: What happens to the last bastion of traditional dress codes when offices re-open? One guy thinks he knows:

Stuck-at-home employees are getting used to wearing more comfortable clothes during the workday. When it’s time to go back into the office, they might not be so eager to pull those stuffy suits and itchy dresses out of the closet.

“You’re going to see people walking back into the office and saying, ‘Why am I all dressed up? I could wear denim today just fine,’” Kontoor Brands Inc. Chief Executive Officer Scott Baxter said in an interview.

Funny, I seem to remember thinking, “I could wear denim today just fine,” walking into work on day one of my first accounting job almost 20 years ago. I’m not suggesting that I was far ahead of the trend, but merely pointing out that some people might be way behind it.

There may be limits to just how informal the office gets, Baxter said.

I don’t think we’re going to get to the point where people are going to wear yoga pants to the office,” he said.

Who’s going to tell him? 


For years now, accounting observers have expressed concerns about creative metrics. Earnings before interest, tax, depreciation, and amortization (EBITDA) was long the punching bag, and in more recent years, we were introduced to things like “Adjusted EBITDA (as adjusted)” and “Community Adjusted EBITDA.”

As you may have already guessed, a new conveniently adjusted accounting measure has emerged:

Companies have always strived to present their financial results in the most flattering light. Now some are going a step further, presenting a new [customized] metric they are calling ebitdac: earnings before interest, tax, depreciation, amortisation — and coronavirus.

This week Schenck Process, a German manufacturing group, added back €5.4m of first-quarter profits that it said it would have made were it not for the hit caused by state-mandated lockdowns. Its operating profit for the period — “adjusted ebitdac” of €18.3m — was almost 20 per cent higher than the same period a year earlier, rather than 16 [percent] lower.

There’s no telling how far this will go. It isn’t difficult to imagine a CFO on an earnings call saying, “Before coronavirus, we had a secret plan that was going to transform our business and crush the competition! We had to scrap that plan once the economy shut down, so we’ll just add back what we would’ve made, which just so happened to be 500% more net income than last year. Great quarter, everyone!”

Accounting is weird.

Fresh from Gusto

COVID news you can use

This section features programs, assistance, and other coronavirus-related information from the past week. It is not meant to be a comprehensive list, so if you see something that we should include here, let us know, or check out our newly launched COVID-19 Small Business Relief Finder.

  • The Michigan Entrepreneur Resilience Fund will provide grants of $1,000 to $5,000 and microloans of $5,000 to $10,000 to underrepresented businesses. Applicants must have generated 12 months of revenue of less than $500,000, and fewer than 50 employees.
  • Anchorage, Alaska has committed $1 million to support small businesses and nonprofits impacted by COVID-19. Recipients will be awarded grants between $5,000 and $10,000 to support their operations. Applications are due by May 22.
  • The Rise Project from Stacy’s Pita Chips awards $10,000 to 15 female founders. Applications will be accepted through June 1.


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Caleb Newquist Caleb is Editor-at-Large at Gusto. In 2009, he became the founding editor of Going Concern, the one-of-a-kind voice on the accounting profession, serving in the role for 9 years. Prior to Going Concern, Caleb worked as a CPA for nearly 6 years in New York and Denver. He lives in Denver with his wife, two daughters, and two cats.
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