Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 1076
Posted: 12/Oct/2006 at 9:47pm
Dear Kulman,
You can hope that such things won't occur in India Inc. after all Umeed pe duniya kayam hai , but it's like gambling that a thief will not find out that the house door has only a dummy lock!! Dont forget, this is the only place where 'aadmi bhi chara khata hai!
Joined: 05/Aug/2006
Location: India
Online Status: Offline
Posts: 1371
Posted: 12/Oct/2006 at 4:31am
Originally posted by kulman
Any views from forum members about how accounting tricks play roll in this and how to find the same out.
I wish it was simple.
Sometimes I heas some weired accounting things in US which is quite legal. For example pension accounting. Companies ASSUME long term return on their pension portfolio. And ofcourse they are overly optimistic. So even in particular year, they lost 10% in real life, on p/l they count assumed return which may be 9-9.5% gain! This is legal.
Second weired practice I am not very sure but recall reading somewhere. That practice is lets say company lends against house for 30 years. They ASSUME profit they will make each year. Then they discount interest and put whole profit in current financial year. Again I am not very sure about this practice and would like to know if somebody has idea.
In India we dont have lots of professional companies. They are OWNed by promotors. So if promotors are honest, we need to worry less about ESOP and other practices. But in long run many professional companies go for giving away options. It is MONKEY SEE MONKEY DO business. Dont think that we will learn only technology from US, we will also learn ACCOUNTING.
There are all kind of scams in CEO/executive compensation. Before back dating they were repricing options because stocks wen down below option price. Our companies(not all) steal in cash, US companies steal in Stcoks. Does it make difference?
I dont think anybody anywhere can control stealing by management.
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
Posted: 12/Oct/2006 at 10:19am
A couple of years back Manish sent me a nice writeup. It stated that General Motors had a hole in their retirement fund and to bridge that they had taken a long term debt component which would be invested in the capital markets the incremental return would be used to fund that hole.Manish do you still have that piece/link?
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
The most expensive stock on the New York Stock Exchange, Berkshire Hathaway shares already have touched the $100,000 mark a few times in intraday trades this month. Once they close at that mark and stay there, Chairman and Chief Executive Warren Buffett will be the only corporate chieftain in America who can say his stock price equals his annual salary.
From around the $10 level in the 1960s, it grew to the $100 mark in the 1970s, the $1,000 mark in the 1980s and the $10,000 mark in the 1990s.
Edited by kulman - 23/Oct/2006 at 7:48pm
Life can only be understood backwards—but it must be lived forwards
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot delete your posts in this forum You cannot edit your posts in this forum You cannot create polls in this forum You cannot vote in polls in this forum
Here's why members would love to be a part of theequitydesk.com
Equity Desk focuses on why to buy shares and invest in share rather than what to buy.
Live discussion forum wherein members can discuss the current Indian share Market trend,
BSE Sensex or the Nifty Index.
Have huge cache of information on Indian and World Share Market.
Analysis of Indian stock market, Global events, Investing insights, portfolio
management strategies and thoughts,
Meet investors from round the globe check their investing strategies share experiences and learn
for their experiences on stocks and shares, evaluate opinions on investing in India.
Active Topics
Memberlist
Calendar
Search
Help
Register
Login
, but it's like gambling that a thief will not find out that the house door has only a dummy lock!! Dont forget, this is the only place where 'aadmi bhi chara khata hai!
IP Logged
