If you think about it, New Year's Eve should be the signature holiday for finance executives. It is, after all, the occasion to remember auld lang syne (the annual report) and make new resolutions for the future (the forecast and budget). In recognition of your special day, this month's issue examines a few of the uncertainties you may face in 2008. Certainly you have spoken up loud and clear about your main concern — the economy. Our most recent Global Business Outlook survey is the most pessimistic yet. (The good news in the bad news: your opinions on this matter are taken very seriously by everyone from the media to the Fed.)
Other looming risks may have yet to hit your radar, but experts caution that when they do, you'll feel it. Take global warming. Environmental engineers are warning companies that carbon trading is coming your way soon, courtesy of Congress, even though nobody knows quite what to measure, or how, or whether it makes a difference (see "Carbon Trading"). Then there's VSOE — no, not a special grade of cognac, but the acronym for vendor-specific objective evidence, with which companies must wrestle when accounting for software-revenue recognition (see "Why VSOE Spells Trouble"). This hot potato is falling into the laps of companies that make everything from automobiles to pet collars now that software is embedded within a huge range of products.
Last but not least, there are hedge funds. It seems that systemic risk in the industry — the possibility that a lot of funds could lose a lot of money at the same time — may be on the rise (see "A Hedge-Fund Mystery"). That's not the kind of thing you want to hear in these uncertain times.
Some of the news is good. On the frontier of outsourcing, for example, "global competition" gets an entirely new spin (see "Gaming the System"), one that may save clients plenty of money. So drink a glass of VSOP, wish yourselves well, and brace for a Risky New Year.