Ritchie’s latest

Jane McTavish says:
June 27 2019 at 8:32 am
I find it hard to imagine what such accounts would look like. Could you construct a simple example using a real business? For example Tax Research LLP?

Reply
Richard Murphy says:
June 27 2019 at 8:38 am
For Tax Research LLP the accounting would be exceptionally simple – but there would be a narrative

For Shell it would be very different

As yet I have not done this

If I get a grant I will

You must cross my palm with silver to find out what the future holds for you moi lass!

30 comments on “Ritchie’s latest

  1. Ah, the joy of Ritchie. I don’t often bother these days as it’s just too easy. I popped back in yesterday after months away to be greeted by this:

    “When saying so I might add that the claim also being made that tax evasion is mainly by low earners is ridiculous. That is because a) they simply don’t earn enough to make up the numbers and b) we know the vast majority of small businesses in the UK are not VAT registered, and therefore have low earnings, and that this is allowed for in VAT gap calculations, but that gap remains about 9% of yield and even after allowing for debt this can only be because more substantial businesses, likely as a result to yield higher earnings, is where the problem arises. Indeed, this has to be the case. Just as most tax has to be paid by high earners,”

    Who would make such a claim? But Ritchie himself.

    “But this does not happen by chance. This cash has to get into the hands of fraudulent traders – and not much of it comes from them trading with each other. Most of it comes from the public who, when offered a deal for cash take it. Builders are the classic case everyone points too. But so too are after-school tutors these days. And nannies and domestic cleaners paid cash in hand. And those who trade through car boot sales. And even people who trade on eBay and “forget” to tell HMRC. The list of ways cash creeps out of the tax system and into the shadow economy are numerous.”

    http://www.t*xresearch.org.uk/Blog/2010/09/11/are-you-cheating-the-taxman-too/

  2. Spud has a new concept…..

    “Sustainable cost accounting (SCA)

    What SCA does is require provisioning for the costs of the transition any business will incur if it is to trade sustainably. And because that transition is required now it requires that the provision be made now. And that the provision be the full cost…..

    I would stress that the resulting provisioning for the costs of transition will be enormous….. Some companies will undoubtedly by climate insolvent as I define it ….. this means that at the very least any company in this position must enter administration whilst it solves these issues. If it can’t, whether it is financially solvent or not at the time, it would have to cease trading.”

    Any company, no matter how well it might be doing, would have to cease trading if it wasn’t sustainable (whatever the fuck that means).

  3. Just read Richard Murphy’s paper. It’s all of nine pages, including abstract, references, etc.

    Nine fucking pages.

    And nothing in those nine pages actually provides a framework for producing the sort of financial statements he proposes. He simply notes that financial accounting and natural capital accounting are, for the most part, completely incompatible… and then goes on to advocate merging these two accounting systems. Using magic, I guess.

    So the bottom line is this: Richard Murphy has absolutely no idea of how to go about designing and implementing the sort of accounting system he is advocating. Richard Murphy couldn’t produce financials for Tax Research LLP using Sustainable Cost Accounting because Sustainable Cost Accounting doesn’t exist. At this time it is little more than nine pages of disorganized thinking. And given that his grasp of financial accounting is tenuous (at best), the idea that he could come up with a practical, efficient and usable accounting system that successfully incorporates natural capital accounting with financial accounting is, well, laughable (at best).

  4. “Sustainable Cost Accounting doesn’t exist”

    It does.

    In Murphy’s head.

    It is a thing so wondrous that it cannot be explained to mere mortals

  5. Any company, no matter how well it might be doing, would have to cease trading if it wasn’t sustainable (whatever the fuck that means).

    What it means is totalitarianism. And totalitarianism is, as we all know, Richard Murphy’s first and only True Love.

    Murphy has yet to offer any solution to any problem that does not include all-encompassing powers to The State. So it is with SCA.

  6. ‘…this means that at the very least any company in this position must enter administration whilst it solves these issues’

    A cynic might read this as saying that nearly every company ought to be put under the control of a third party in order to make sure it complies with this policy.

    They wouldn’t have to cease trading, they’d just have to do as Murphy says.

  7. Today sees the announcement of yet another profound endeavour by Murphy, surely now the fount of almost all useful human knowledge.

    Again, this was invented by Murphy, by no-one else, and from the original thoughts of Murphy alone. Ladies and gents, I give you [fanfare]:

    Sustainable Cost Accounting

    This can be added to Murphy’s other discoveries:

    Country by Country reporting
    Green Quantitative Easing
    Modern Monetary Theory
    The Green New Deal
    The Tax Gap
    Secrecy Jurisdictions
    Treble Entry Bookkeeping
    The Second Law of Thermodynamics
    (Probably the First, Third and Fourth Laws as well)

    Have I missed any?

  8. Dennis – ‘Richard Murphy has absolutely no idea of how to go about designing and implementing the sort of accounting system he is advocating.’

    The same is true of Unitary Taxation. I spent a year of free time reading up on how people might make it work, and concluded that no-one has a clue at all. The idea is that you tax a business based on the split of labour, sales, and assets – but you have no reliable or consistent way of measuring any of them, and all the proposals I read came down to ‘split it in a way that seems fair’. Which is exactly how the current transfer pricing system works.

  9. I would stress that the resulting provisioning for the costs of transition will be enormous….. Some companies will undoubtedly by climate insolvent as I define it ….. this means that at the very least any company in this position must enter administration whilst it solves these issues. If it can’t, whether it is financially solvent or not at the time, it would have to cease trading.”

    The effect of this would make even the most apocalyptic Brexit bullshit forecast seem like a rounding error. Mass business failures, mass unemployment because this megalomaniac dunce has made up some crap the entire country must follow.

  10. Imagine if the UK got caught in a triple pincer between Murphy’s mass destruction of UK business, general Green insanity and Corbyn’s evisceration of personal wealth by his lifetime income tax on wealth transfers above a 125k allowance. Not just the pips and the ‘nads, but every square inch of our flesh is about to be squeezed and squeaked.

    We’re on an express elevator to hell – going down!

  11. “The effect of this would make even the most apocalyptic Brexit bullshit forecast seem like a rounding error. Mass business failures, mass unemployment because this megalomaniac dunce has made up some crap the entire country must follow.”

    Yes it is instructive that we can’t on any account have a Hard Brexit because of the loss of economic growth that will result in, but having stayed put in the EU we must then ‘decarbonise’ our economy by 2050 so that we all have living standards akin to maybe 40-50 years ago.

    WTF is happening to the UK? Has someone been putting psychotropic substances in the water supply? Is it aluminium saucepans having their revenge, with an entire social class of people going down with Alzheimers? Has 50 years of dope smoking addled the brains of the entire country?

  12. @Jim
    My theory is seveal things. Firstly enough of the population believe they are sufficiently insulated by their wealth from the effects of these policies they espouse that they imagine it won’t adversely affect them. Secondly never underestimate the power of mass hysteria. Once an idea has gained sufficient currency everyone feels obliged to go along with it.History is littered with examples. Thirdly propaganda. If you listen to/watch the BBC it is a never ending stream of climate change porn, only punctuated by transgender stories. Fourthly guns. The State has them we don’t. In the final analysis that might be the crucial one.

  13. “Firstly enough of the population believe they are sufficiently insulated by their wealth from the effects of these policies they espouse that they imagine it won’t adversely affect them. Secondly never underestimate the power of mass hysteria. Once an idea has gained sufficient currency everyone feels obliged to go along with it.History is littered with examples. Thirdly propaganda. If you listen to/watch the BBC it is a never ending stream of climate change porn, only punctuated by transgender stories”

    All true. I’ve repeatedly said this is all not going to end well. People as you say are insulated from reality, but one day reality is going to break through that insulation. Indeed its the only way I can see the current outbreak of mass delusion and hysteria being pricked – by a hefty dose of really nasty reality. Its just not amenable to rational argument and peaceful reform. Its got to crash and burn badly before people will come to their senses, sadly.

  14. Under Ritchie’s accounts Shell would be highly profitable but forced to write down its assets to zero on ‘sustainability’ grounds. At which point it would be insolvent and presumably nationalised for nothing. Which is presumably the point of the exercise.

    He hasn’t got any funding yet http://www.corporateaccountabilitynet.work/funding/

  15. I dispair that the only solution to shake the country out of its stupidity is a good solid dose of Corbynism.

  16. He knows nothing about cost accounting or the work relay management accountants do, I had some discussion a few years back and gave up.
    He’s seems to be saying you should take your long term forecast and factor in the impact of becoming ‘sustainable; which ignores he fact that the model should already incorporate current legislation and expected trends. For example I’d bet that Ford will have figures kicking around on the impact of moving from ICE to electric vehicle sales.
    These numbers are highly speculative and intend to shape long term strategy and planning not be included in the Financial accounts, though of course the decisions made will trickle through as real things happen.
    I suppose an alternative could be some form of carbon trading type schemes but we already have those and making the downstream person separate out the cost in their accounts doesn’t make sense,e.g Steel has carbon trading so the ‘sustainability’ that should be built into that system is already in my accounts as part of purchase prices paid for items containing steel

  17. Thinking about it how will this work in our economy, if one of my suppliers isn’t ‘sustainable’ then does that mean I’m not sustainable if there’s no alternative supply;as it’s quite posable an entire industry could face the same ‘sustainable’ cost differences

    I wonder if his paper mentioned going concern as he just seems to want to expand the definition to take into account non-existent sustainability legislation

  18. The whole thing is bollocks.

    We’re trying as a nation to be carbon neutral. But that allows for some carbon output, matched elsewhere by carbon extraction, I guess.

    Yet no net carbon producing company could of itself claim to be sustainable on its own.

    So no matter what the rest of the economy might be doing, all these companies under Murphy’s fuckwittery would have to cease trading.

  19. @Jim, @Ian Reid

    Another big problem is politicians want be liked/loved and have no conviction; thus they embrace touchy/feely things and refuse to make difficult decisions.

    Margaret Thatcher, Donald Trump and Nigel Farage are examples of conviction politicians who don’t care if many don’t like them.

    My worry about BoJo is he craves being liked/loved.

  20. Sorry, what? He wants my money to draft his accounts in the manner he says I should draft my accounts?

    Oh, OK. Sounds like a decent gig.

    Need I ask whether I’ll be getting his money to draft my accounts in the manner he says I should be drafting my accounts?

  21. jgh,

    I dispair that the only solution to shake the country out of its stupidity is a good solid dose of Corbynism.

    I read about some archaeological research in to a river in Poland or Hungary. It appears that this river flooded regularly and every time it did people moved to the top of the hill out of the way and lived there for a while. Over the years they started to creep back down and eventually built on the banks until it flooded again. At which point they all moved back to the top and the process started again. The conclusion was that there is a collective memory that eventually gets forget major events.

    Collectively we are forgetting that we had a Labour government from Oct 1964 to May ’79 with the exception of Edward Heath for 3.5 years, and he was no better than Wilson and the Tories were as wet then as they are now.

    During that period of Labour rule just about everything was nationalised: Railways, mines, telecoms, water, steel, car making energy, gas …… and it culminated in the only time the NHS didn’t get a real increase in spending (1978), the bins not being emptied, dead not being buried, massive unemployemnt figures and the country grinding to a halt because of strikes and works to rule.

    Instead belief is that Thatcher just appeared out of nowhere and decided on her policies for no apparent reason other than being an evil Tory and that we’d be much better returning to Labour’s golden years before she vandalised the country.

    So yes, I fear you’re right and we need Corbyn good and hard so that we can get some grown ups back in the room and restore the collective memory of what happens when we let socialists out to play.

  22. @BiND

    Don’t forget that as every Lefty knows, the evil Tories closed the mines*. Which of course produced coal which as every Lefty will tell you is evil.

    *In reality, more mines were closed and jobs lost in the 11 years before Maggie came to power than in the 11years she was in power.

  23. Andrew,

    Yes, but the point of mining isn’t production of coal, it’s about employment of miners, the vanguard of the revolution.

  24. Same Ritchie

    “I think there’s a problem. Hire me for the solution I don’t have but am sure that I am the only person smart enough to come up with it’.

    He’s the Anita Sarkeesian of economics.

  25. According to his own logic he should cease trading. Tax research llp produces nothing of worth – makes no profit and depends on a single man living in a 4 bedroom house producing green house gases from heating. He regularly travels by plane or train or even a car burning fossil fuels. The ratio of value produced against resources used must be in the region of 0 to 100. He should immediately declare himself (and his ideas) bankrupt and cease.

  26. In delicious irony…

    The CAN seems to use “corporateaccountabilitynet.work” as its domain name. The .work TLD is owned by Minds+Machines, now where are they registered and operating from…..?

    whois corporateaccountabilitynet.work
    % IANA WHOIS server
    % for more information on IANA, visit http://www.iana.org
    % This query returned 1 object

    refer: whois.nic.work

    domain: WORK

    organisation: Minds + Machines Group Limited
    address: Craigmuir Chambers, Road Town Tortola VG 1110
    address: Virgin Islands, British

    contact: administrative
    name: Admin Contact
    organisation: Minds + Machines Ltd
    address: 32 Nassau St, Dublin 2
    address: Ireland
    phone: +1-877-734-4783
    e-mail: ops@mmx.co

  27. jgh/ BiND

    While I take your point re: Corbynism I do think that it would take a military coup to get these people out once they are in power. Look at the Labour party where the Hard Left has taken total control. They really cannot be allowed access to the levers of power.

  28. moqifen – does he generate any of that dangerous greenhouse gas?
    Does he have hot food or a hot drink? Or a hot bath / shower?

    Steam is a dangerous greenhouse gas produced by people unthinking of the damage caused.

  29. Surely human life as currently lived on planet Earth is not sustainable. Its all predicated on unsustainable use of resources. So logically what every good Gaia worshipper should do would be to top themselves……….

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