WeWork, the shared-office startup, isn’t just pioneering new ways of working, but new ways of accounting.
In its bond prospectus this week, it introduced a new term that sent accountants’ green eye-shades spinning: “community-adjusted earnings before interest, taxes, depreciation and amortization.” The measure of profit not only subtracts out costs like taxes, but ordinary expenses related to running its business, like marketing and design costs, the Wall Street Journal reported (paywall).
“It shows the economics of our buildings,” according to a WeWork spokesperson. “In other words, if we stopped growth investments, we have a very healthy business running healthy margins. For bond investors, community-adjusted Ebitda is a number they can hold onto.”
The term is also the latest in the creeping expansion of accounting acrobatics favored by businesses eager to hide the fact that they’re losing tons of money. These non-standard measures don’t just torture the English language, but could indicate more worrisome trends at a company, according to research (paywall).
To help startups and other cash-strapped firms more effectively distract analysts and investors from mediocre earnings, Quartz offers the following ideas for pro-forma accounting practices:
EBACE Earnings before all conceivable expenses
EBILT Earnings before inevitable legal trouble
EER Earnings excluding reality
EEG Earnings excluding gluten
ELOL Earnings leaving out losses
EASA Earnings according to sycophantic analysts
EBJC Earnings before John Carreyrou
EWPF Earnings if women were paid fairly
EBAIS Earnings before AI singularity
EBAAI Earnings before Amazon ate our industry
EBACT Earnings before awkward Congressional testimony
EBPB Earnings before pivot to blockchain
EBCDB Earnings before catastrophic data breach
EMFEBT Earnings from moving fast excluding broken things
EBBFVA Earnings before branded fleece vest amortization
EAMAGA Earnings after America Made Great Again
EBLFAW Earnings before life found a way
EBITMCMF Earnings before interest, tax, and mid-century modern furniture
EBLWAEAM Earnings but like what are earnings anyway, man