By Eileen AJ Connelly -- AP Personal Finance Writer
NEW YORK (AP) — When companies release their quarterly financial results, do you feel like you need an interpreter? Do "loan-loss provisions," ''other-than-temporary impairments" and "low visibility" leave you scratching your head?
You're not alone. Much of the language used when companies release results can be mystifying.
"Corporate earnings are probably as confusing, if not more so, than personal taxes," said Sam Stovall, chief investment strategist for Standard & Poor's.
Fresh off the annual 1040 challenge comes "earnings season," the quarterly ritual when companies give investors a glimpse into their operations. After suffering brutal investment losses, more investors are trying to assess the health of companies in their portfolios. But they're only running into an abundance of arcane terms that shed little light for the uninitiated.
"I don't think that companies are trying to deceive anyone or create a secret club, where you need a decoder ring to figure out what's being said," said Paul Larson, who writes Morningstar's stock investors' newsletter. Most of the terminology developed over time to reflect specialized situations.
Part of the problem stems from companies trying to both follow standardized rules, known as generally accepted accounting principles, or GAAP, while at the same time giving investors a broader picture of their operations. There are a host of things that companies can add or subtract from their GAAP bottom line to offer a different view of their results, a list that may seem to be expanding in this difficult economy.
"As a result, jokingly some people now call operating earnings 'earnings before bad stuff,'" said Stovall.
For amateur investors, it can end up sounding like reports are issued from the Tower of Babel. "If you don't have the accounting background, it just flabbergasts people," said Larry Reno, a board member for BetterInvesting, a nonprofit that provides investor education. "It's like osmosis. You start digging in there and after five or six years, you finally figure out what they're talking out."