A Test for Trump's SEC Chief

President Donald Trump’s new head of the Securities and Exchange Commission, Jay Clayton, will soon face a choice about how much transparency to require of companies that issue shares to the public. We hope he’ll come down on the side of sunshine.

For most public companies, preparing financial statements isn’t just simple arithmetic. Questions such as how to value a hard-to-sell investment or when to recognize revenue from a long-term contract aren’t always open-and-shut, and can have a big impact on reported earnings -- and hence on the stock price. Yet companies often provide scant information on these judgments.