Mortgage Rate Rises

[Jono8]

This could very well happen.
But as individuals we have no/little control.

Yes you can vote Labour. Or give all your spare cash to charity. (is anyone doing this? No.. Because we are all selfish).

We live in a real world. This world. If society is going to collapse it will. Are people in those jobs in a bad position. Yes. Should we be helping them. Yes. Are we? Not as much as we could. Because communism doesn't work.

We are innately selfish. Our society rewards it.
We can talk about hypotheticals. But at the end of the day you need to do what's best for you.




There's a mismatch here where you are talking about an ideal World etc. And others are talking about making best life you can as an individual. And it's all getting mixed up.

I'm not talking about an "ideal" world at all. I'm talking about maintaining an economy that pays people who are on (relatively) lower wages enough to survive and have a decent standard of living.

That isn't being idealistic. That is just talking about the need to prevent social unrest and a complete collapse of functioning society/economy.

What happens when it simply isnt worth taking part anymore...?

 

[Slam62]

This could very well happen.
But as individuals we have no/little control.

Yes you can vote Labour. Or give all your spare cash to charity. (is anyone doing this? No.. Because we are all selfish).

We live in a real world. This world. If society is going to collapse it will. Are people in those jobs in a bad position. Yes. Should we be helping them. Yes. Are we? Not as much as we could. Because communism doesn't work.

We are innately selfish. Our society rewards it.
We can talk about hypotheticals. But at the end of the day you need to do what's best for you.




There's a mismatch here where you are talking about an ideal World etc. And others are talking about making best life you can as an individual. And it's all getting mixed up.

Well it used to be that way, it was partly social reformers who got things changed although protests helped a bit.
Only a 150 years ago really. Maybe less.
Personally I think those financially struggling due to debt are going to be left to sort themselves out.

 

[Slam62]

I'm not talking about an "ideal" world at all. I'm talking about maintaining an economy that pays people who are on (relatively) lower wages enough to survive and have a decent standard of living.

That isn't being idealistic. That is just talking about the need to prevent social unrest and a complete collapse of functioning society/economy.

What happens when it simply isnt worth taking part anymore...?

What happens when the cost of a basic standard of living increases and the government cannot afford or idealistically won’t increase support.?

 

[Dis86]

Lol
No they cant.

Businesses of any size do not simply change policy and book things on a whim.

As I said above its very normal for things to need restatement now.

Years ago auditors would only look at some parts of the balance sheet. They would ignore items that would increase profit if not there. IE they were only really concerned with things that artifically increased profit. This is by far the normal things that companies would try to do, and is basically exclusively why things like SOX controls came into existence. Companies trying to overstate their results.
Now they look at everything and if there are items they don't like that would affect profit in either direction they will press for them to be unwound.

The vast majority of companies will have documented processes and deviation from that is significantly reviewed. Its the most obvious way of trying to manipulate the result.
Significant changes in accounting will also usually see prior years restated when published account are out. So that comparative numbers are clear.

I mean its literally my profession, I know exactly how it works.

Could you link me to the standard/law that says a company can't choose to spend their cash up front on an asset rather than spreading the cost over a period of years? And that they can't do it with some items and not others?

 

[Kanpai]

Clearly a load of rubbish. If everyone could do this, then isnt that doing exactly what they are telling us not to do (earn more money)?

Not everyone wants to do this though, it's a lot easier for people to complain than to do something about it.

 

[Mercenary Keyboard Warrior]

Could you link me to the standard/law that says a company can't choose to spend their cash up front on an asset rather than spreading the cost over a period of years? And that they can't do it with some items and not others?

A company can do it, you can choose what assets you write off and which you capitalise. But you need to have a policy if your anything but a small concern.
It will almost certainly be challenged at audit.

Fixed assets are covered by IAS16, which state "

Recognition​

Items of property, plant, and equipment should be recognised as assets when it is probable that: [IAS 16.7]

• it is probable that the future economic benefits associated with the asset will flow to the entity, and
• the cost of the asset can be measured reliably."

Not only that, the calculations used for tax in regards assets are different to those used for producing the accounts.

Literally no large company would expense regularly things that should be assets. For multiple reasons.

You always spend your cash on the asset upfront, its nothing to do with cash.

 

[malachi]

Yours is the mindset that will always keep standing on society than raising it up

So what's your solution then? Hope it gets better and sort itself out?

 

[Kanpai]

So what's your solution then? Hope it gets better and sort itself out?

we'll just blame the government and those immigrants innit bruv.

 

[malachi]

we'll just blame the government and those immigrants innit bruv.

And the rich! Don't forget the rich!

 

[Mercenary Keyboard Warrior]

And the rich! Don't forget the rich!

Or the boomers!

 

[Jono8]

And the rich! Don't forget the rich!

You say this flippantly, but yes, the rich.

The absurd wealth inequality is the biggest route cause of all of it.

 

[Kanpai]

You say this flippantly, but yes, the rich.

The absurd wealth inequality is the biggest route cause of all of it.

Can you explain to me like a 5 year old how people get rich?

 

[Jono8]

Not everyone wants to do this though, it's a lot easier for people to complain than to do something about it.

?

Most people do, but they are not illogical people, and understand there is not some fantasy better job for all of them because if there were, society would cease to function.

 

[Jono8]

Can you explain to me like a 5 year old how people get rich?

i did that earlier on in this thread.

 

[dowie]

Clearly a load of rubbish. If everyone could do this, then isnt that doing exactly what they are telling us not to do (earn more money)?

Increasing productivity would help with inflation which is basically what @malachi is arguing for, you're confusing that with someone simply demanding a big pay rise which the BOE chief has been warning against.

 

[Martini1991]

Can you explain to me like a 5 year old how people get rich?

Make mates with people in government and get some cushy contracts.

 

[Mercenary Keyboard Warrior]

The first response should be "define rich"

 

[Dis86]

A company can do it, you can choose what assets you write off and which you capitalise. But you need to have a policy if your anything but a small concern.
It will almost certainly be challenged at audit.

Fixed assets are covered by IAS16, which state "

Recognition​

Items of property, plant, and equipment should be recognised as assets when it is probable that: [IAS 16.7]

• it is probable that the future economic benefits associated with the asset will flow to the entity, and
• the cost of the asset can be measured reliably."

Not only that, the calculations used for tax in regards assets are different to those used for producing the accounts.

Literally no large company would expense regularly things that should be assets. For multiple reasons.

You always spend your cash on the asset upfront, its nothing to do with cash.

And surely if you have a logical explanation of why you did it, even if false, that challenge will result in nought?

 

[Mercenary Keyboard Warrior]

And surely if you have a logical explanation of why you did it, even if false, that challenge will result in nought?

Nope

The tax man would require a recalculation and would levy fines based on the result and how they perceived* the error to have occurred.

*they get to act as judge and juror in this, the only way to appeal ultimately is via the courts.

Willful and deliberate would be more weighty than negligent.

The individual who signed off the accounts (if say a sole accountant) could also be fined and potentially struck off from their respective body.
If it was a larger accountancy firm individuals would probably be fine, but they would levy fines instead. At this point its more about reputational damage than financial, the financial impact would be lost business etc.
The potential charge would be false accounting. Theft act 1968, https://www.legislation.gov.uk/ukpga/1968/60/section/17

Edit just to add, its quite unlikely it would go beyond fines from the tax man.
And again its quite possible an asset would be for tax purposes given a much higher write down value than in the normal books of account where profit is calculated.
The government like for example 100% year 1 write downs to try to promote spending in some areas.

 

[Dis86]

Nope

The tax man would require a recalculation and would levy fines based on the result and how the perceived the error to have occured.
Willful and deliberate would be more weighty than negligent.

The individual who signed off the accounts (if say a sole accountant) could also be fined and potentially struck off from their respective body.
If it was a larger accountancy firm individuals would probably be fine, but they would levy fines instead. At this point its more about reputational damage than financial, the financial impact would be lost business etc.
The potential charge would be false accounting. Theft act 1968, https://www.legislation.gov.uk/ukpga/1968/60/section/17

But that's not false accounting. They're accurately illustrating what was done. It's the equivalent to you deciding to buy a car outright vs on finance when you have the money in your bank account. Just because its there, you don't have to spend it but you may choose to.

In the same way I might decide this year to conduct a more in depth audit of my assets which ascertains that they're not worth what we previously thought.