I'm no ACCOUNTANT - but i think i found something good ?Something good - that may benefit the shareholder and - SP VALUE
While looking through the 2015 Year End - I asked myself -
What is the positive vs negative accounting of - depreciation of equipment ?
If your a private company - you get to write it off - brings you into a lessor tax bracket of what is owed -
If your a listed company - same thing - you write it off to bring you into a lessor tax bracket - but - but - but - will it help or hinder (skew) the over all ebitdas or revenues ?
AA - Accountant Acrobatics - 101 -
One has to ask - If PYD logged 2015 - equipment depreciation of - $1,150,275.00 - Ask yourself - would such a figure help with their lower tax bracket ? - - I WOULD THINK SO - -
But what would it do if it was not accounted for ? I don't know the rules t a ccounting - but what if pyd was able to not account for such a loss ?
Would such a figure not affect the ebitda ?
Would it be able to show more ebitda's and or revenues -
But on the flip - how much more would the company lose on taxes - or is it more beneficial to not account the depreciation and add more to the bottom line - and help the share price ?
Can both be done ? Still account for depreciation - but also report the revenues or ebitda's with no depreciation ? Talk about a betwix - so confusing -
Again - i don't know - i'm no accountant - but it would make sense if they could do both - account for it - but as well show the true figure of revenues without depreciation?
Thus - what would that do the the SP applied to a traded stock ?
What do other companies do ? Has anyon ever seen another company report depreciation and then press two numbers one with and one without ....
Accounting for depreciation - has benefits
Accounting without depreciation - has benifits
When it comes to accounting practices - what can a company do with in the guidelines ?
Especially listed companies that are market dependent on thier share price ?
If not accounted for - it simply tacks on as more revenues shown - and the company simply notates a greater revenue and later notates - such funds for replenishment of machine ?
When one considers the positives and negative - - who gains most - - who is favored most - then who would benefit most - if depreciation is accounted for - or - not accounted for - company or shareholder ? Can both be done - and two figure reported - to bring clairity to the matter of how much is borught in - for share holder and share price sake ?
2015 Equipment Depreciation -
- $855,699
- $294.576
---------------
--$1,150,275.00 - Two categories
I'm treating this as a POTENTIAL POSITIVE - IF APPLICABLE AND IF IT CAN BE APPLIED -
END RESULT - POTENTIALLY MORE REVENUES SHOWN -
Q-4 REPORTED EBITDA ( EXAMPLE OUTCOME )
$2,080,520 Q-4 ebitda
$1,150,275 Q-4 equipment - IF ALLOWED TO BE ADDED BACK IN ?
---------------
$3,230,795 Q-4 possible ebitda ? Is this possible ?
Is there such a thing as a savvy skilled accountant that looks at all aspects of accounting ?
One who considers that a listed company also has shareholders attached - one who applies an accounting practice that favors both company and shareholder - mindful of the SP ?
Again - im no accountant - and i don't know the rules per-se - and i tried searching depreciation accounting methods - but to my surprise - its like a hard wired program mentality that's taugght to accountants - they seem to all teach to look for depreciation values - apply it to look out for the company - and not one article i read looked out for shareholders - only mindful of company.
Again - is there such a thing as an accountant that looks at both sides - listed company accountant whose concientious of shareholders ?
Who knows - and i dont even know if a company cant account for depreciation - i tried searching that too -but to no avail - just thought i'd mention this - and perhaps theres some sort of positive to this - and just maybe - i've stumbled upon an accounting gem - that may have been overlooked - due to trained money accounting mind set to only look out for company - so - just maybe this could benefit the over all revenues per each quarter and increase their bottom line values ? Who knows .. !.
Do your own DD - this is certainly not advice - just an idea - a maybe - a maybe not - a potential - and even then - i myself place no confidence in this tid bit - it may not even be plausable nor permissable to be preacticed or implemented with in the accounting guidelines ...
Again - Im no accountant....
BEFORE POSTING - - i researched more - and i think i found something to what im trying to convey -
Caption Quote - Depreciation is a major issue in the calculation of a company's cash flows, because it is included in the calculation of net income, but does not involve any cash flow. Thus, a cash flow analysis calls for the inclusion of net income, with an add-back for any depreciation recognized as expense during the period.
Does this mean - they can add back depreciation - to properly valuate the net income - and
therefore - increase the net sum ?
Hard to find the right wording when this field is so not my forte -
But in my minds eye - if its a ghost figure - being taken from ed to the ebitdas - and not added back - then technically is there not more revenues than stated being brought in ?
Chew on that for a bit - think about it - the yellow highlighted wording seems to suggest this -
at least thats how i understand this - i may be wrong... who knows.... Treat this post as a newbie investor that doesn't understand squat - eshhkkks ! Hey, AT LEAST i'm trying...
P.S. - I think im posting - for sake of being freshly enumerated into the class of - Stock Shock -
( your cue to laugh )
Hey.. didn't you hear ?
Bullboard posting is the new therapy for those who are down with - stock shock - !
Purge with words - baby - lol
- Accounting Link -
https://www.accountingtools.com/overview-of-depreciation