GMI Ratings will introduce a combined set of accounting and governance ratings on some 9,000 companies in nearly 60 emerging markets countries, said Sarah Cohn, director of marketing and communications.
The new accounting and governance risk ratings will be available to institutional investors later in July. A specific date hasn’t been set, Ms. Cohn said. The new ratings will extend GMI’s AGR ratings of some 20,000 companies in developed markets.
“Investors can integrate GMI’s AGR emerging markets ratings into their financial models to identify and mitigate portfolio risks, deepen their quality of earnings analysis … and anticipate high-impact events that may not be detected by traditional methods,” said a GMI statement.
To arrive at the ratings for emerging markets companies, GMI will use about 50 metrics, broken down into high-risk-level categories of revenue recognition, expense recognition, asset/liability valuation, high-risk events and governance practices.
By contrast, the firm uses about 60 metrics for developed markets companies.
The ratings take into account whether companies use International Financial Reporting Standards or local generally accepted accounting principles.
The ratings scale ranges from 1 for very aggressive to 100 for conservative. Ratings for individual companies won’t be available until the introduction.