| Subject: | Re: [socialcredit] To: Tim Carpenter AND Tim Knight | | Date: | Wednesday, May 4, 2005 15:54:30 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
| In reply to: | Message 1220 (written by Timothy Carpenter) |
A few replies [REPLY 050405] are inserted below:
--- Timothy Carpenter <timbeau_hk@yahoo.co.uk> wrote:
> Dear Bill
>
> On 3/5/05 5:10 pm, "William B. Ryan"
> <w_b_ryan@yahoo.com> wrote:
>
> > (While addressing these comments directly to Tim
> > Carpenter, I am also addressing them peripherally
> to
> > Tim Knight.)
> >
> > Remember, Tim, we were going to discuss
> double-entry
> > accounting as our next step in the extrapolation
> of
> > the A+B theorem, you and me together, with me
> guiding
> > the discussion.
> >
>
> I look forward to seeing your take on accounting,
> but I do not guarantee
> that I will agree on it as I am not convinced, for
> all your knowledge, you
> are accurate in your understanding at all.
>
> > We never got to that point, for various reasons,
> but
> > mostly because you wouldn't do your homework.
> Now,
> > you're writing as if you know something about
> > accounting, but from your comments today, and
> > earlier, it appears that your understanding is
> > superficial and confused.
> >
>
> Just because there may be mistakes and errors on
> specific terminology or
> modus operandi does not invalidate the point I am
> trying to make.
>
> > I do not believe it is possible to really
> understand
> > A+B, in full analytical detail--which is not
> required
> > for most of us--without prior, valid, knowledge of
> > the rules and procedures of accounting. It is
> > prefatory (though not sufficient) to UNDERSTANDING
> > the theorem, as opposed to ACKNOWLEDGING (or
> DENYING)
> > its conclusions. Other knowledge prefatory to the
> > understanding is Calculus, its basic rules, etc.,
> > which is another subject we could discuss, but
> likely
> > won't. I might add, parenthetically, that Douglas
> > had profound knowledge of both. :-
> >
>
>
> Understanding of concepts is more important than
> procedure, for I feel, in
> this case at least, procedure may have got in YOUR
> way.
>
> (Btw, It serves absolutely no purpose to this
> discussion for you to bring in
> such arcane terms. It does not impress me one bit.)
>
> > [CARPENTER] "Depreciation is not a cost, it is
> about
> > managing book value i.e. how the resale value of
> the
> > asset falls, not how long will the asset last
> before
> > replacement."
> > ------------------
> > -------------------
> >
> > Depreciation is about the allocation of costs
> against
> > sales.
>
> Only as a secondary function.
>
> OED clearly states:
>
> "The amount of wear and tear (of a property etc.)
> for which a reduction may
> be made in a valuation, an estimate or a balance
> sheet."
>
> Of course depreciation CAN be used to as a GUIDE to
> costs and I do not deny
> it and have acknowledged it before. But what you are
> saying is that the
> primary, if not sole purpose of depreciation is to
> expense against sales. In
> that you are just plain wrong.
[REPLY 050405] Tim, this is not a matter for
discussion or debate. Depreciation is expensed
against sales according to the depreciation schedule.
-
>
> One may wish to depreciate faster or slower or apply
> the costs faster or
> slower (over shorter/longer periods) - i.e. You can
> depreciate at one speed
> but reclaim the costs at another.
[REPLY 050405] What a nonsensical and confused
statement. What the hell do you mean by "reclaim"
costs? Costs are not "reclaimed" but offset through
sales.
-
>
> Even if you are right, it affects the argument in
> terms of money flows for
> the examples I am discussing with Jim not one jot
> and only appears to serve
> the bizarre need of yours to cast aspersions about
> your counterparty's
> credibility.
[REPLY 050405] When you make utterly false
statements, I will certainly cast aspersions on your
credibility.
>
>
> > It has virtually nothing to do about "resale"
> > value, or how long the asset will last before
> > replacement.
>
> Try telling anyone running a business that.
[REPLY] Current value has nothing to do with profit
and loss unless it is something in the ordinary course
of business you would sell, in which case the profit
or loss is recorded when you sell it, not before. If
it was something that you purchased to use that you
later determined was surplus to your needs, the
residual undepreciated value (according to the
depreciation schedule) at the time of sale would be
expensed against its sale price in determining the
gross profit or loss on the transaction.
-
>
> > Balance sheets almost invariably
> > OVERSTATE the present resale or liquidation value
> of
> > its various assets, for the simple reason that the
> > firm AS A GOING CONCERN is presumed to have
> greater
> > value than the sum of its parts.
> > -
>
> Bill, if a company incorrectly states the resale
> value of assets, then the
> amount in its depreciation account is insufficient
> to allocate the correct
> level of costs against sales as you suggest. Which
> is it, Bill? - you cannot
> have it both ways.
[REPLY 050405] Tim, I'm informing you, not debating
with you, the fundamental rules of accounting. I'm
not going to try to explain to you why the rules are
what they are. They are what they are. They have
been what they are for centuries. And there are good
and sound reasons why they are what they are.
>
> >
> > [CARPENTER] "Depreciation is already 'expensed'
> > against the capital account ? you cannot expense
> it
> > twice."
> > ------------------
> > -------------------
> >
> > Categorically, no, depreciation is most definitely
> > NOT "already 'expensed' against the capital
> account."
> >
>
> I am sure you understand the point I am making here
> so this need of yours to
> tear it down is unproductive.
[REPLY] I think I do understand the point you were
making, and it indicates you are utterly confused as
to the rules and conventions of accounting.
-
>
> > It has nothing to do with expensing it "twice."
> Your
> > response here reflects a profound confusion as to
> the
> > fundamental rules of accounting. The Asset
> account
> > representing the depreciating item is credited
> > according to its depreciation schedule. Expense
> is
> > debited SIMULTANEOUSLY, in accordance to the rule
> of
> > equality of debits and credits. Capital, Assets
> > minus Liabilities, has been reduced BY THAT
> > TRANSACTION considered in isolation. Without
> Sales
> > there is no Profit. In a simple schedule of
> > accounts, Expense and Sales are closed directly to
> > Capital. In a more complex schedule, they are
> closed
> > to Capital through intermediate steps through
> > subsidiary accounts. The result is the same.
> > -
>
> Much of the above shows you are yet again determined
> not to understand what
> am saying and just pick holes and throw
> distractions. I am well aware of
> balancing debits and credits and...'without Sales
> there is no Profit'? for
> heavens sake!
[REPLY 050405] I am making fundamental points,
without which you have have no prospect in
understanding A+B, which is why I terminated the
previous discussion. It is a waste of my time. You've
flunked the course, Tim. Hasta luego.
>
> >
> > The very most basic double entry accounting system
> > has at minimum four accounts, plus a fifth
> account--
> > Capital, following Pacioli. Every more complex
> > system is in extrapolation from the conceptual
> basic
> > system:
> >
> > Assets
> >
> > Liabilities
> >
> > Sales
> >
> > Expense.
> >
>
=== message truncated ===
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