Labour is treated as a burden in accounting, by choice.

For a corporation, business, what else is labour but a burden? Money has to be paid out for it – a useful definition of what is a cost, a burden, or not, no?

21 thoughts on “Eh?”

  1. In the first video, he asserts that there are no fixed rules of accounting, that accounts are only prepared for investors in large companies, and that accounts are devoid of information about where companies operate and how much they pay staff.

    So much for accounting standards and company law and stock exchange disclosures, let alone SEC requirements, management accounting and all the guff that goes into corporate reports. He probably doesn’t even know about the requirement for a Modern Slavery Statement.

    What a joker he is

  2. @ Diogenes
    There are two sets of accounting standards GAAP/GAAS for smaller companies and IFRS which were invented for and apply only to companies listed on stock exchanges. He *cannot* be ignorant of that and still walk in a straight line. I have issues with IFRS because David Damant was overly focused on the Balance Sheet which, due to inflation and variability of exchange rates, they cannot get right anyhow at the expense of the P&L which matters more to guys like me. However Murphy’s comments are ludicrous.
    If by “Labour” he means the party of Corbyn and Keir Starmer, that is undoubtedly a burden to accounting as well as to business.

  3. Could he possibly mean that you should capitalize labor, the way that you capitalize the wages of researchers and call it r&d expenses? R&d wages are still expenses, but they are often folded into capital expenses that are written off over years instead of as an immediate wage expense.

  4. TC even so, capitalisation of labour is strictly controlled. So it can only be the labour used in constructing fixed assets. In terms of the Companies Act, it is included in the costs “that are directly attributable to bringing an asset into working condition for its intended use.” Most R&D costs have to be written off in the year but, under IFRS, “development costs are able to be capitalized if the company can prove that the asset in development will become commercially viable (meaning the technology or product in development is likely to make it through the approval process and generate revenue”.

  5. Christ he looks like a fvcking leper in that video: maybe the aftermath of Covid which he so heroically fought? He should use soft filtering to spare the children watching

    Also, I’ve mentioned before – his physical tics remind me of Joe Cocker performing, but Joe at least had been ravaged by drugs

  6. If employees really were on the balance sheet, the left would never stop screeching about how it proves companies are all about slavery.

  7. The burden isn’t just cost, Tim. Having employees invites government busybodies to your business.

  8. Dennis, Author of the Tay Bridge Tax Return

    First of all, he’s blotchy as hell, and that ratty-ass beard does him no favors.
    Second, he fucking bounces throughout the video. It’s enough to make you seasick.
    Third, his head looks way to big for the rest of his body. It looks like a balloon.
    Fourth, as noted above, he’s talking shit out his ass.

    He really is the William McGonagall of accountancy. Unfortunately, in the age of Youtube, we are denied the opportunity to throw eggs and herring at him.

    Still, it is nice to know that there’s at least one accountant out there that’s dumber, crazier and uglier than I am.

  9. There’s little point in trying to work out what he actually means from his muddled emissions, as that way lies madness.
    Much easier to just assume 99.9% of his flatulence is wrong – attempting to understand how & why will give you a headache.
    The ‘Professor’ is a cretin

  10. Capitalisation of labour is strict, say you put a wall in the wrong place and have to remove and rebuild it you can only capitalise the cost of building it once

  11. Every single thing a business does is a burden, from winning clients and customers to adding up how much profit it’s made.

  12. @ Dennis
    I trust that you got a major refund of tax in respect of the impairment of the fixed asset as well as trading loss due to the compensation claimed by relatives of the passengers.
    I am not willing to suffer watching a video of Murphy, so I shall accept your comments as saving me the pain (fourth is undoubtedly the case, third is typical incompetent positioning of the camera so that the microphone is close to his mouth, and I *really* don’t want to know about the rest).
    There are quite a lot of accountants out there who are dumber than you – I’ve lost count of the errors I have found in audited accounts – but for most accountants it’s difficult to tell without meeting them and without a photo that they meet all the conditions that they are simultaneously dumber crazier and uglier than me (the overwhelming majority of accountants I know are less ugly than I) but Murphy crosses all the boxes.

  13. Bloke in North Dorset

    Gamecock’s right:

    “ The burden isn’t just cost, Tim. Having employees invites government busybodies to your business.”

    I’ve been looking at the definition of burden on a number of online dictionaries and not one lists cost as a synonym.

  14. I don’t know about the UK, but in the States “payroll burden” generally refers to the non working wage costs of employing someone, such as payroll taxes, insurance benefits, workers compensation insurance, retirement benefits, and paid time off. It’s not uncommon for a third of the total cost of hiring someone to be “burden”, or in other words, for every dollar spent on wages for time worked another 50 cents is burden.

  15. TD – For us we calculate a burden rate, which is the total cost of employing someone (including wages, retirement funding, workers comp some indirect costs attributable to them etc) divided by the total productive hours available for them to work. This is the rate that we use to put their time into WIP as they work on a job.

    And yes, the total cost of employing someone is a burden, as is the cost of buying the parts that they also sell. It would be far more profitable for us if we could make the same sales without the people or the parts but, as yet, we haven’t quite worked out how to do that!

  16. I have issues with IFRS because David Damant was overly focused on the Balance Sheet which, due to inflation and variability of exchange rates, they cannot get right anyhow at the expense of the P&L which matters more to guys like me.

    First thing that I tell the junior accountants under me is that under IFRS the P&L is an interesting irrelevance. Get the balance sheet right and the P&L pretty much becomes a balancing figure that is relatively meaningless (especially since the new Revenue standard was introduced). Under IFRS the most important measure of the company’s performance is the cashflow.

  17. I had to look him up on YouTube and just had to downvote and immediately stop watching each of his videos. Yes, a downvote counts as an interaction on YT, but length of time watching is a major aspect of the algorithm so only watching a few seconds counts against a channel.

  18. ” his muddled emissions”
    Too easy to misread an l as i. My mind is still reeling from the vision the mistake engendered.

  19. My parents created a retail business with a workshop in the back. Eventually my brother joined them. The business expanded, they bought large premises and turnover increased. My parents retired.
    Then Covid-19 hit. The shop had to shut. Half of the staff were shielding and anyway retail was forbidden. Now the shop has opened up again. My brother is manning it single handed, and any workshop jobs are done off site. It’s making more profit than it has for years.
    Less turnover, but more profit.

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