And GAPP net income has a similar clear and practical metric: maximize net income reported.
But there are an almost infinite number of ways to write things down to get the 'right' GAAP answer. The number I write down for the IRS affects taxes. And, perhaps, my freedom. (I know. Sometimes GAAP numbers have an effect on transfers and payments and borrowing rates, etc. and are more than just numbers to be read. But they are mostly numbers to read and inform.) I know, there are many ways to write down the IRS numbers, many choices, etc. But somebody at IRS (or Justice) will be a final judge.
Re: politicians gauging things based upon how much various industries bribe them
I am the stockholder. I WANT them to be bribed to further my interests. I'm on the industries' side of the table.
Re: The final tax laws passed turn on nuances of committee meetings and back room deals.
But a company is forced to deal with IRS and tax code. Tax code convoluted? You must be having a nightmare.
R2O
Yet stock options have been with us for centuries and it seems odd that accountants have yet to construct anything Acceptable
Re: Well, they have, but politicians have thus far prevented them from incorporating things.
You may be correct. What things have been prevented by the politicians? Refusing to make GAAP into law doesn't constitute prevention. Or does it?
Re: In 2000, Cisco was making money hand over fist. And yet their tax return showed zero income. And if you think there's no fudging on tax returns, you're living in a dream world.
But you already presumed the answer --- that they were really making money hand over fist and yet avoided paying taxes. I am glad they avoided paying taxes. Why do you believe that they hid their 'hand over fist' money from the IRS rather than that they invented the GAAP 'hand over fist' money? Ah. Perhaps because GAPP net income is the 'gold standard' and hence cannot be fudged?
I hope you don't fudge on your tax returns. I don't want to pay for your incarceration. On the other hand, if you fudge your GAAP income, does it have the same force of law?
WRT option accounting, GAAP will do what it will. All I need is a worst case statement counting (just counting) the number of options that are outstanding. No fudging. In the money or not.
Do you think accountants might be coaxed to give me that? Doubtful.
Give me clarity first. Then as few dependencies as possible. Then as much certainty as possible. I don't see that in GAAP.
Perhaps it exists. Know of someplace one can get (for free, of course) a formal model of GAAP? Dependency tree? Anything beyond human language. |
