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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: Keith Monahan who wrote (4679)	7/2/2002 2:43:17 PM
From: ahhaha	Read Replies (3) \| Respond to of 24758

Start with assumptions from the bad past and you end up nowhere. The purpose of recording something as capital is to ensure that costs are allocated to the correct period. Did you say you were an accountant? That isn't he intent of the classification at all. That's a result of the classification. For example, if you implement a supply chain system for $10 million and the system has a useful life of 10 years, it would be proper to recognize only $1 million in expense each year. Why? Why not recognize it for what it is, an expense incurred right now? The answer is taxes. I would think any changes in this methodology would be made independently of any tax considerations. Would think? I'd be backing off too. Please try to argue your position though, because I want to show what fraud accountancy has been forced to embrace by tax collecting governments. Specifically, what is the rationalization for depreciation. Why must its cost be distributed over time? Having said that, I think some type of free cash flow model that eliminated the distinction between expense and capital would be preferable to the current accounting treatment. "Free cash flow" is a term that is ambiguous. Let me define "cash flow". It means net income plus depreciation. But depreciation isn't a tangible quantity of money that you can hold in your hand or spend. The next question is how "cash flow" can be bound, not free. Are you saying that depreciation can be paid out of net income or its equivalents? QED. Thus all cash flow must be free. How could it be unfree? Answer: accounting gimmicks needed because government can't let corporations get off scott free without paying their fair share.(See, I know how to talk the left wing talk. I should run for office.)