Adonis Diaries

Transparent accounting: Based on revenue, away with totally biased Net Profit gimmick

Posted on: October 31, 2011

Transparent accounting: Based on revenue, away with totally biased Net Profit gimmick

Revenue is the one item in the balance sheet that no corporation is about to cheat on, not even gang and drug criminal organizations. Why?

Board of director members take their cuts directly from the total revenue.

They know how much the company is generating in gross profit, excluding side revenues and under the table bonuses and favors…The percentage on the revenue cut must correspond to 50% of the gross profit, and they get first cut, ahead of time, and all other items can be changed to correspond to the expected net profit.

You cannot have a balance sheet or working statement or any other accounting gimmick without accurate revenue…

Even without the huge amount of data, financial and economical data, companies in particular line of business have an appreciation of the gross profit before the legal year starts, based on the previous revenue and accurate forecasting…

Every item in the balance sheet is known as a percentage of the revenue.  You change a percentage and you know what the managers should be doing as consequences: Fire employees and how many, reduce facility costs, save on energy, training, quality of spare parts, inspection, quality control,…

Actually, all the accounting standards and accounting schools and degrees are not meant to fine-tune the accounting records of anything.

The government and the corporations have no need for all the accurate numbers and inspection of records and papers: They know the revenue and the proper percentage on the revenue that each item is measured accordingly.

Government can as easily and more accurately get the taxes on revenue, instead of waiting for the gross profit computation, and saving the citizens the exacerbation of enacting loopholes as large as the State of Montana.

If the financial and business communities consider the tax rate on revenue high or exaggerated, they can lobby to simply reduce the rate of the percentage on the revenue…What’s the big deal?

Is transparency anathema to governing?

Should government persist on creating more mysteries than the citizens are ready to swallow?

Is governing meant to constantly resume the financial emulation of cult organizations with code-names, secrecy, childish gimmick…?

Why the top 1% of corporations have to skim 20% of total revenue, then rearrange all the items in the balance sheet, so that the workers and employees sweat out negotiating on a better minimum wage?

Who is taking advantages of the small prints as footnotes in the balance sheet and other accounting gimmicks? Why should the nation needs expert on how to comprehend the meaning of the footnotes, if transparency is the goal in transactions?

Occupy Wall Street protests should demand that accounting ratios should be transparent on a special accounting sheet:  Citizens must know how much the top 1% are actually paid, how much the middle management is paid, and how much the rank-and-file of workers are paid as a proportion of the total revenue…

Actually, who is generating the profit if not the workers and employees, and who is making the economy grow, and who is defending the interests of the top 1%?

Occupy Wall Street protests task is to demand transparency in all financial undertaking, starting with a transparent accounting.

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adonis49

adonis49

adonis49

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