ChatGPT's Opinion on Mandatory Accounting

[Seattle]

Oh, you need to switch from physics to psychology?

Are you saying that physics does not cause consumer technology to wear out? Karl Marx used the word Depreciation 35 times in the first two volumes of Das Kapital. However the first gas powered automobile was not invented until after his death.

So ignoring the depreciation of automobiles and other durable consumer goods is being out of touch with reality. There were 200,000,000 motor vehicles in the United States in 1995. Where did the depreciation go?

It looks like the economics profession is out of touch with reality. Maybe you need to psychoanalyze them.

I think I'll stick with you.

 

[psikeyhackr]

I think I'll stick with you.

ROFL

I read this book in 1976:

The Screwing of the Average Man (1974) by David Hapgood

That book made so much sense I concluded that there was something wrong with what I was taught about economics in college where I was taking Electrical Engineering. I have noticed that the term E-Waste did not exist back then. Anyway I decided that I was going to figure out what was wrong if I had to read Samuelson's Economics cover to cover. I still had the book from college. So I would come home from work and read 15 to 20 pages each night.

Eventually I got to NNP, Net National Product. It was a simple equation so I kept going. I was about 5 pages beyond that when it occurred to me that the Depreciation of durable consumer goods was missing. I was repairing hi-fi equipment at the time. Most consumers buy crap but it still wears out therefore Depreciates.

It was another two days before I thought, "Who gives a damn about stereo equipment? How much does the depreciation of all of the automobiles purchased by consumers amount to?"

And since Sputnik!

So our brilliant economists have been using defective algebra since there were only 2.5 billion people on the planet. Now we have Eight Billion.

Defective Algebra Forever! LOL

 

[Seattle]

ROFL

I read this book in 1976:

The Screwing of the Average Man (1974) by David Hapgood

That book made so much sense I concluded that there was something wrong with what I was taught about economics in college where I was taking Electrical Engineering. I have noticed that the term E-Waste did not exist back then. Anyway I decided that I was going to figure out what was wrong if I had to read Samuelson's Economics cover to cover. I still had the book from college. So I would come home from work and read 15 to 20 pages each night.

Eventually I got to NNP, Net National Product. It was a simple equation so I kept going. I was about 5 pages beyond that when it occurred to me that the Depreciation of durable consumer goods was missing. I was repairing hi-fi equipment at the time. Most consumers buy crap but it still wears out therefore Depreciates.

It was another two days before I thought, "Who gives a damn about stereo equipment? How much does the depreciation of all of the automobiles purchased by consumers amount to?"

And since Sputnik!

So our brilliant economists have been using defective algebra since there were only 2.5 billion people on the planet. Now we have Eight Billion.

Defective Algebra Forever! LOL

WIth most government statistics it's about how they are used and why they came up with that statistic in the first place. NDP is about production in the economy so it's about capital machinery used in production. Household refrigerators and cars aren't used directly in industrial production.

That's the economics answer. The accounting answer is similar. Accounting is about standardizing items so that one can compare apples to apples. We don't depreciate cars not used in a business (that's just a tax law) and we don't write them off.

We do write off capital equipment used in business but it's only allowed for tax purposes to do it over a period of years.

 

[Sarkus]

We do write off capital equipment used in business but it's only allowed for tax purposes to do it over a period of years.

My OCD kicking in: while it may be a translation thing, you write down capital assets over their agreed useful economic life (which could be 1 year if there is sufficient reason), and you write off an asset when you write the value down to zero due to it no longer being used by the business (and remove it from the register).

In practice, most assets that are written off (i.e. have zero value and no longer used) already have zero value in the company books.


Source: me - an ACA


Anyhoo - carry on.

 

[Seattle]

My OCD kicking in: while it may be a translation thing, you write down capital assets over their agreed useful economic life (which could be 1 year if there is sufficient reason), and you write off an asset when you write the value down to zero due to it no longer being used by the business (and remove it from the register).

In practice, most assets that are written off (i.e. have zero value and no longer used) already have zero value in the company books.


Source: me - an ACA


Anyhoo - carry on.

Depreciation means that you write off the value of the asset over it's expected useful life. The value of the asset depreciates over time and you can write off a certain amount as an expense against taxes every year.

Apparently it's a translation issue. Carry on.