Well, if they’re not talking to me they’re not being serious, are they?

I added the emphasis, and for good reason. If the FRC is serious – and it should be – it would be inviting its critics in, as well as civil society and others who have had much to say about its massive failings, not least on entirely avoiding the entire issue of country-by-country reporting, which is probably the lightning rod of current concern on accounting right now. But it isn’t. It’s just continuing as a talking shop where the chaps talk to the chaps, as the highlighted section proves.

And until it changes the only thing to say about it is that it is unfit for purpose.

36 thoughts on “Well, if they’re not talking to me they’re not being serious, are they?”

  1. I hope the FRC issues a suitable rebuttal along the lines of:

    ‘I am afraid only serious contributions to the debate will be considered within the broad boundaries of mainstream opinion. This is not a forum where every fringe crank can be allowed to have a hearing, especially those who are on the record as opposing freedom of debate on economic matters’

    But I will not hold my breath – he would probably relish such a response…..

  2. “If the FRC is serious – and it should be – it would be inviting its critics in”

    Lol

    “It’s just continuing as a talking shop where the chaps talk to the chaps”

    I refer the honorable gentleman to the Lol I gave some moments ago.

  3. You also missed these gems from the ‘Hard Brexit ‘ post

    ‘But all this means some other things will change considerably. First, we will make more for ourselves’.

    A local shop (or series of stores) supplying all goods to each community – how nice!

    ‘Second, energy sufficiency will become much more important.’

    Windmills for all!

    ‘Third, we will need to re-explore the relationships between tax and money I address in The Joy of Tax and discover that government spending is not dependent on the tax base but that the tax base is dependent upon the level of government spending.’

    The government will take care of everything – everyone will receive 100% of their income from the state and be taxed at 100% , achieving the ‘perfect circle’ of prosperity that neoliberalism has failed to achieve so dismally

    ‘Fourth, we will have capital controls: I think that will be inevitable and a massive shock to the world’s financial systems, but nothing else will be able to contain the risks in our systems.’

    It’s Tony Benn’s ideas from the 70s combined with contemporary Pyongyang – a golden ticket

    ‘Fifth, we have to embrace the idea that we may live in a less materialistic, consumer focussed society. servicing our own needs creates work without requiring nearly so many imports. But this is the way that we need to go anyway. The biggest rethinking of the economy for two centuries may have to happen.’

    Most definitely looking to Cuba or NK as the model for future development…

  4. FFS, this country by country reporting idea is not only bullshit, it’s totally irrelevant and would be hugely expensive and costly to operate and audit – as it would usually cut across the fiscal organisation. I’m no great fan of the FRC but if they fall for this then they are greater fools than I thought.

  5. “Most definitely looking to Cuba or NK as the model for future development…”

    With Cambodia in the 1970s as the target state.

  6. Does this fool understand that a Welfare State depends on the surplus from an advanced economy? That future spending on welfare is calculated as depending on future levels of economic growth?

    Where is the economic surplus going to come from to pay for welfare in Richie’s paradise?

  7. @ Diogenes
    Under UK GAAP we used to have a requirement for segmental reporting that included separately reporting revenue, profits and assets for every *significant* country (or region, if a region, comprising countries that are not themselves significant, is significant, or “Rest of World”). Murphy wants country-by-country reporting for every *insignificant* country: that is the bit that is irrelevant and expensive.
    Every company has to report its profits to the tax inspectors of every country in which it does business (with the possible exception of Bermuda which does not tax income, just expenditure and consequently has one of the highest per capita income and standard of living on the planet). Murphy wants them to report to *himself* as well.

  8. John77 nails it.

    We already have country by country reporting. To the tax authorities. To the people who matter and can understand what is being reported to them. What Murphy wants is for him to be able to snoop into the tax affairs of businesses so that he can mislead and took the gullible by drawing false conclusions from the information. The media and public in general have already shown they don’t understand tax. Murphy wants to be able to benefit his own aims from that.

  9. This is from the ‘Tony Blair’ thread on TRUK. – a classic!

    harry maitland says:
    September 20 2016 at 7:54 pm

    Why criticise Tony Blair for having opaque sources of income? You are keeping the source of one of your grants a secret. As always you apply different rules for others than you apply to yourself.
    Reply

    Richard Murphy says:
    September 20 2016 at 11:15 pm

    The grant in question has ended

    I agreed to keep the source secret because the trustee in question feared harassment: I decided her concern was reasonable and justifiable

    What would you prefer? That she was exposed to such risk? And I have clearly indicated the scale

  10. @Max,

    This of course would be Anne Miller of the Kenneth Miller Trust. So open it’s not listed at Companies House or the Charity Commission.

    I thought Ritchie was against opaque trusts and organisations paying people to lobby other people to change government policy.

  11. I agreed to keep the source secret because the trustee in question feared harassment: I decided her concern was reasonable and justifiable

    What would you prefer? That she was exposed to such risk? And I have clearly indicated the scale

    Hodge the Dodge?

  12. We already have country by country reporting. To the tax authorities. To the people who matter and can understand what is being reported to them. What Murphy wants is for him to be able to snoop into the tax affairs of businesses so that he can mislead and took the gullible by drawing false conclusions from the information.

    I just wonder if Murphy will ever figure out that the tax figures in audited financial statements aren’t real tax figures. They’re estimates based on IFRS/GAAP, rather than tax code. That, in and of itself, should suggest to any sane person that country-by-country reporting will not provide the sort of information Murphy seems to so desperately need.

    The fact that FRC has chosen to ignore Murphy does give me hope for the future of accountancy in Wog Land, though.

  13. @ Dennis the Peasant
    No, they are estimated figures for the reported year based on the tax code, with adjustments for the difference between estimated and actual figures for prior years, then reported under IFRS (IAS12 para 12). This means that they have a tenuous relationship with revenue for the reported year.
    In the UK we have Cash Flow Statements that accurately report real tax figures: the amount actually paid during the reported year – which of course relate to profits earned in earlier years and so have no direct connection with revenue or profit for the reported year.

  14. Max

    The Tony Blair thread is even better. What kind of person writes this sentence I ask you?

    ‘Over they years I have acquired a reputation for looking at Tony Blair’s affairs, so this is interesting, posted on his website today:’

    I do hope he realises that his postcard from Munich takes on a very new meaning:

    ‘My sons realised that some of the people who went there were a bit like their father’

    He needs to substitute the word ‘worked’ for ‘went’ there I think. I hold no torch for Blair, but he is infinitely preferable to someone who really for the common good needs to be locked in a dark room somewhere for his own and society’s health….

  15. VP

    The masturbatory posts and sundry writings of Richard Murphy have the same relationship to deep, rational, intellectual thought that the singing of Florence Foster Jenkins had to the operatic art form.

  16. John77/AndrewC

    Of course, the tax authorities see profits applicable to each jurisdicition however I take Murph to be wanting, for example, Unilever UK to break down its sales and costs for every country where it does not have a taxable presence

  17. No, they are estimated figures for the reported year based on the tax code, with adjustments for the difference between estimated and actual figures for prior years, then reported under IFRS (IAS12 para 12). This means that they have a tenuous relationship with revenue for the reported year.

    Not understanding your quibble here. Are you being a pendant?

    Income and expenses estimates based on the tax code, and then massaged for temporary and permanent differences between tax code and IFRS/GAAP, with estimated tax expense then calculated via an estimated blended tax rate are not required to file a corporate tax return. They are required if you want your audited financial statements to receive an unqualified opinion from your auditor. The number is a creature of IFRS/GAAP, not tax code.

    My point stands… The number is useless for the purposes Murphy wishes to use it for.

  18. I agreed to keep the source secret because the trustee in question feared harassment: I decided her concern was reasonable and justifiable

    What would you prefer? That she was exposed to such risk? And I have clearly indicated the scale

    There could have been mobs outside her house! OUTSIDE HER HOUSE! Perhaps she might even have been murthered.

  19. Dennis the Peasant said:
    “The number is useless for the purposes Murphy wishes to use it for.”

    Actually it isn’t; Murphy wants to use it to make posturing blog posts criticising other people in order to make money for himself. Any old numbers will do for that.

  20. @ Dennis the Peasant
    They are excellent for the purposes for which Murphy wishes to use them – to pretend that numerous businesses are paying ridiculously low rates of tax by comparing tax paid on Year N’s profits less losses brought forward and/or tax overpaid in prior years with profits in Year N+1.
    I was pointing out that certain US accounting follies do not apply outside the USA, which is not actually the whole world – and since we, not you, are burdened with Murphy the rules in the UK also matter to anyone wishing to refute his claims. Saying something that is not true of UK accounts would merely give him an excuse to crow about your ignorance and give his claims unjustified credibility.

  21. “I’m totally anti-sugar on health grounds, so eat very few biscuits… But if forced to accept one, it’s always a pleasure to have a shortbread.”

    An alien mind.

  22. Didn’t Brown have to convene a focus group to determine where exactly to triangulate his answer?

    Custard Creams for me; ginger biscuits for dunking.

  23. Saying something that is not true of UK accounts would merely give him an excuse to crow about your ignorance and give his claims unjustified credibility.

    You overstate your case. There is nothing I could say that would give any of his claims credibility, largely because I have no standing with anyone with regards to anything. Which is as it should be. Unlike Ritchie, I am fully aware that I’m just another half-assed, middle-aged accountant of no particular distinction.

    And let’s remember this: Ritchie is usually ragging on U.S. companies (Google, Starbucks, Apple, etc.), and the last time I checked they were publishing financials prepared using GAAP. Until the SEC finally gets around to forcing U.S. companies to use IFRS, my initial statement stands.

  24. It really can’t be helping Labour’s prospects with the general electorate that their leader seems like he would fail a Turing Test. Or a Voight-Kampff test, anyway.

  25. DtP, also Jj77 is strangely unaware of deferred tax – what you describe as timing differences such as those due to depreciation versus tax allowances… Let him live in his world… And we live in our world

  26. i look forward to the leftie article complaining about post imperial subjugation and racism inherent in taxing minority interests

  27. @ Diogenes
    Deferred tax does not feature in cash flow. The tax charge for the year shown in the P&L includes deferred tax. So there was no need for me to mention them in my debunking. Minority interests are shown after tax.
    However let’s not talk about tax on discontinued activities

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