Hi Chai-On
Business do sometimes have to restate their prior year accounts. For the
purpose of value accounting, depreciation cannot be known in advance,
only ex-post. Example:
Asset scrapped after 3 years. Value of money constant. Sales revenue
$100, $150, $250 in years 1, 2, 3. Depreciation 20%, 30%, 50%.
On Mon, 2009-09-07 at 01:18 +0900, 이채언 wrote:
> Dear Philip
>
> May I ask just one question? How and on what ground could you change the bygone financial report in restrospective? Can you get back money from the man who sold his goods 2 years ago because it is now known to be unfair even though the trade was not unfair by any means because the new invention did not yet appear at that time?
>
> Why do you think it is unfair to make the depreciation by 40%? It was only because the new invention did not appear until the 4 th year. The 20% depreciation was fairenough so long as the new invention did not yet appear at that time. And the 4th year share holder will lose more than the previous holders not because of the unfairness but because of the new invention.
>
>
> Yours
>
> Chai-On
>
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Received on Mon Sep 7 00:11:57 2009
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