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Bryce_in_TX

Bryce_in_TX
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  • Here's The One Way Tesla Can Survive [View article]
    @ajitMD,

    "4. Financials look weak because of R&D, and expansion related SG&A. Most of these should have been capitalized and depreciated, not expensed. They are related to increasing capital investment. "

    I don't agree that "Most of these should have been capitalized". A third of R&D, perhaps (BMW and VW's capitalization rates of R&D) no one really knows. But NONE of SG&A should be. Those are current operating expenses that only benefit the current period.

    25% of Tesla's gross profit is currently coming from regulatory credits, when Tesla has said that is being reduced, but in fact they received more in credits in 2014 than any prior year, so some misinformation is going on.

    So, yes, the financials look weak. More cars have to be sold to make up for the loss in credit revenue, assuming that loss takes place as Tesla said it will.

    The Superchargers are not reaching anywhere near satisfactory density and won't for the foreseeable future. It will be years before they do. You can't go by a simple Google map from Texas to CO or OR, or anywhere in that region without extensive planning and hours out of the way. I'm sure Texas is not the only state like that.
    Apr 21, 2015. 02:10 AM | 2 Likes Like |Link to Comment
  • Here's The One Way Tesla Can Survive [View article]
    @TwoShedds,

    "And, at the same time Tesla delivered 10,030 vehicles in 1Q of 2015, up 50% from 1Q 2014. "

    And yet, Tesla is still getting 25% of their gross margin from regulatory credits. ($216 million of $881.6 million in 2014) In fact, the 3rd and 4th quarters of 2014 showed the most revenue from regulatory credits, ever.

    "Revenue from the sale of regulatory credits totaled $216.3 million, $194.4 million, and $40.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. " (Page 69 of 10-K)

    http://1.usa.gov/1GDd6Jo

    I was under the impression that Tesla was getting less revenue from the credits now. I wonder who gave me that impression?
    Apr 21, 2015. 01:40 AM | 3 Likes Like |Link to Comment
  • Here's The One Way Tesla Can Survive [View article]
    @Stephen Pace,

    " Good luck doing a cross country trip when your recharge gets you 14 miles back per hour. "

    Good luck doing a cross country trip using superchargers. It will take you hours and miles longer vs an ICE because the network isn't built out yet. Try a trip from Dallas Tx to Denver CO or to Oregon from Dallas. The infrastructure isn't there, and won't be for the foreseeable future (end of 2016). It's going to be years, if ever, before it is as convenient as an ICE.
    Apr 21, 2015. 01:32 AM | 2 Likes Like |Link to Comment
  • Here's The One Way Tesla Can Survive [View article]
    @winfield100,

    "@CParm "That which you call "exorbitant" is often about $5..." ...for about 25-30 miles range,... in 2-3 hours.... like i said "you seem to be writing as someone with minimal experience using public charging networks" A supercharger would be somewhat (lots) faster, you do the freshman math. (hint: multiply or divide by a factor of somewhere between 6-10 to get the lesser amount of time depending on what is your numerator or denominator"

    To date there are zero superchargers in Dallas/Ft Worth. Do the math.

    http://bit.ly/1DatBYy

    And look how much time was wasted getting some charge, at least and hour and a half. Ahhhhh, that's what I call "luxury".
    Apr 21, 2015. 01:17 AM | 2 Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    The reason I see the financial system unraveling is because morals seem to be less important to people today. I say "seems" because I don't know if it's just my sense or if it's really true.

    So, there is some wisdom in making things more conservative than they really are, to protect investors from this immorality that "seems" even more pervasive in the corporate and business world today that it "seems" like it was when I was a young person.

    But in doing so, we sacrifice the two primary qualities that make accounting information useful for decision making: relevance and reliability.

    There is always a better way. That "way" needs to be developed, not ignored, IMO.
    Apr 15, 2015. 09:44 AM | Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    @Mark_A,

    I may not be certified, but I do have experience in the field.

    Here it is from two individuals who have doctorates in accounting and write for prestigious accounting literature, page 356 and 357 in the link:

    "Future benefits are undoubtedly created by many R&D activities and, conceptually, these R&D expenditures should not be expensed as incurred. It is the uncertainty of these benefits that limits R&D capitalization. Yet expensing R&D costs impairs the usefulness of income."

    http://bit.ly/1MEhPtS

    Yes, the reason such expenditures take place in the first place is to find new, future revenue flows.

    IFRS has a better idea on this topic than US GAAP. Like I say, the US standard was written 41 years ago when intangible assets weren't such an important part of the landscape. It's old, simplistic, and out of date.

    I don't see getting a much more accurate picture of a company's operating performance and financial position as the problem. I see accountants, CPAs, who know the picture is materially distorted yet violate their own code of conduct by signing off on the financial statements anyway, as the bigger problem. (I am talking about the real estate industry and signing off on income statements and balance sheets which materially misrepresent the actual economic picture.)
    Apr 15, 2015. 09:23 AM | Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    "I trust the combined wisdom of the US accounting profession and the SEC on this subject to not allow gains on unrealized sales of non-liquid assets such as real estate (accounting rules to require write-downs if assets are impaired). "

    Good for you. As it pertains to the accounting profession, I generally think their motives are good, although they seem very slow in moving on some things, such as Development expenses that are currently all expensed when incurred. The reason such expenses are incurred in the first place is to benefit future periods, yet current GAAP treats such expenditures as if they have no future benefit. The standard that governs them was written in 1974. Me thinks it's time to revisit that standard. So, I am not convinced that the accounting profession "wishes" unrealized gains or losses to be excluded from financial statements altogether. IT may be they simply have too much on their plate and see this as not that great a priority.

    I also don't think being concerned about too much depreciation being recorded, something not caused by GAAP itself, is a good reason for not better reflecting accurate real estate values, per GAAP. Great Caesar's ghost, if auditors don't have the authority to cause change in depreciation because it doesn't reflect economic depreciation, what good are auditors?

    The SEC is another matter. I don't trust that agency whatsoever for very good reasons.

    The US does have a strong financial system, but we have seen it unraveling over the last 15 years or so because of lack of standards within corporate walls, as well as the accounting profession. What has built that credibility has been the integrity of the financial statements, as well as those who prepare them and audit them. I don't see that system getting stronger with statements which entire industries disregard because they simply aren't credible.

    As I said, "we are doing the best we can" isn't a sufficient answer for me. We need to find a better solution or we may find the accounting profession losing more and more credibility, not just with those on the outside, but those within (myself included) as well.
    Apr 15, 2015. 08:33 AM | Likes Like |Link to Comment
  • Morgan Stanley lowers estimates on Tesla Motors [View news story]
    @cparmerlee,

    I don't see much cash that could come from monetizing the leases. 1,150 leases is all I see from 2014 that could be monetized. At, say, $1500 a month per lease over 36 months, that is just $62 million. Discounted for time value, it's even less.

    The guaranteed resale value transactions Tesla has already received the full amount of cash for them, and the assets have legally been transferred to the customer. I don't see how you monetize them. This is where the bulk of the "operating lease" assets come from on the balance sheet.
    Apr 15, 2015. 12:11 AM | Likes Like |Link to Comment
  • Morgan Stanley lowers estimates on Tesla Motors [View news story]
    Ignoring you Mikestesla. I wish there was an ignore button.
    Apr 14, 2015. 11:34 PM | 4 Likes Like |Link to Comment
  • Morgan Stanley lowers estimates on Tesla Motors [View news story]
    "@Cecil,


    I am not talking about real economic earnings, after adjusting for GAAP distortions on R&D and lease accounting. If MS estimates bear out for 2015, there won't be any real economic earnings. "

    Oops, that should say, "I am talking about real economic earnings...."
    Apr 14, 2015. 10:55 PM | Likes Like |Link to Comment
  • Morgan Stanley lowers estimates on Tesla Motors [View news story]
    @MikesTesla,

    I never said Tesla is a bad investment. Again, you misinterpret and misconstrue what I say. That is why I don't wish to debate with you.

    I am not a bear, don't know whether Tesla is a good or bad investment, and I don't know where the funding will come from, but I do think Tesla Motors will need additional funding this year. Those are my statements. You can misinterpret them all you want, but what you think is very warped. I don't wish to debate with you because you warp things into things I never said.
    Apr 14, 2015. 10:47 PM | 4 Likes Like |Link to Comment
  • Morgan Stanley lowers estimates on Tesla Motors [View news story]
    "No, your point and the point of others "BEARS " commenting on this subject is that the cash they will need , will come from share delusion from secondary offerings which MS will do as return " favor" from TSLA to Jonas being bullish and pumping their stock price."

    No, I never said from where the funds would come from. That is your misconstruing what I have stated, as you did on the other thread. And btw, I am not a bear.

    As I said, I don't wish to debate with you. You misconstrue things to mean what they don't actually mean, and this is a very good example of that.
    Apr 14, 2015. 10:45 PM | 3 Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    @Bruce,

    You are speaking of tax accounting. It was created for collecting revenues for the federal government. Its purposes are totally different than GAAP.

    PEople using cash inflows and outflows is analagous to the cash flow statement.

    GAAP standards were developed for investors and creditors of publicly held companies, outsiders to the operations and knowledge of the company. That is very different than a household.

    But, hey, if GAAP is worthless, let's throw it away and use what is useful.
    Apr 14, 2015. 10:39 PM | Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    @Mark_A,

    "I don't understands what is wrong with cash flow. It is probably how every single person on this forum tracks their own personal finances. "

    Nothing is wrong with cash flow. The problem is with the GAAP Income Statement and Balance Sheets for this industry. They don't reflect reality.

    IF cash flow is good enough for publicly held businesses, then let's just do away with FASB and accrual accounting.
    Apr 14, 2015. 10:27 PM | Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    @Mark_A,

    "The purpose of depreciation (from an accounting standpoint) is to show that an asset has decreased in value over time, and that it needs to be replaced at some point, and that a financial allowance needs to be made for that as a charge against current income over the life of the asset."

    And this is why the term "bean counter" is used in a derogatory manner at us who are in accounting, when we don't recognize reality and see that over time real estate appreciates instead of depreciates, yet we stay "stuck" with our heads in the sand, insisting no change in accounting is warranted and an industry starts to use other performance measures besides the established ones.

    Something is amiss and needs changing, IMO, to better reflect reality.
    Apr 14, 2015. 10:22 PM | Likes Like |Link to Comment
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