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LWW
04-07-2010, 05:33 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Accounting basics: when a company experiences what accountants call "a material adverse impact" on its expected future earnings, and those changes affect an item that is already on the balance sheet, the company is required to record the negative impact--"to take the charge against earnings"--as soon as it knows that the change is reasonably likely to occur.

This makes good accounting sense. The asset on the balance sheet is now less valuable, so you should record a charge. Otherwise, you'd be misleading investors.

The Democrats, however, seem to believe that Generally Accepted Accounting Principles are some sort of conspiracy against Obamacare, and all that is good and right in America.

Here's the story: one of the provisions in the new health care law forces companies to treat the current subsidies for retiree health benefits as taxable income. This strikes me as dumb policy; there's not much point in giving someone a subsidy, and then taxing it back, unless you just like doing extra paperwork. And since the total cost of the subsidy, and any implied tax subsidy, is still less than we pay for an average Medicare Part D beneficiary, we may simply be encouraging companies to dump their retiree benefits and put everyone into Part D, costing us taxpayers extra money.

But this is neither here nor there, because Congress already did it. And now a bunch of companies with generous retiree drug benefits have announced that they are taking large charges to reflect the cost of the change in the tax law.

Henry Waxman thinks that's mean, and he's summoning the heads of those companies to Washington to explain themselves. It's not clear what they're supposed to explain. What they did is required by GAAP. And I've watched congressional hearings. There's no chance that four CEO's are going to explain the accounting code to the fine folks in Congress; explaining how to boil water would challenge the format. </div></div>
&gt;&gt;&gt;ISN'T THAT JUST PRECIOUS&lt;&lt;&lt; (http://www.theatlantic.com/business/archive/2010/03/henry-waxmans-war-on-accounting/38206/)

LWW

Sev
04-07-2010, 06:38 AM
These people are a bunch of buffoons.

pooltchr
04-07-2010, 07:22 AM
they are so used to their creative accounting practices in government, they just can't comprehend that businesses tend to operate within the guidelines of reality, not under hope and change!

Steve

LWW
04-07-2010, 08:49 AM
The difference is that most buffoons realize they are stupid ... these folks truly believe they are smart.

LWW

LWW
04-07-2010, 08:52 AM
And had they not reported the changes they would have been guilty of the same crimes as the ENRON crooks ... who happened to be big demokook backers.

<span style='font-family: Arial Black'><span style='font-size: 26pt'>WHY IS DEMOKOOK WAXMAN PROMOTING ENRON TYPE ACCOUNTING STRATEGIES?</span></span>

LWW

pooltchr
04-07-2010, 09:39 AM
Because it creates a situation where the results of their actions actually come to light. They are getting exactly what they asked for, and now they don't like it.

Steve

Sev
04-07-2010, 05:06 PM
Whats that quote by Nancy?

Oh yes.

Poor baby. Poor baby.