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Count dividends as expense
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LP Paradoxian RJ: LP Paradoxian Post Rating: 0 + / - Total Posts: 18 Karma: 10 Joined: Apr 10, 2012 |
Posted on May 5, 2012 I know, this isn't the case in the real world but EOS accounting has nothing to do with the real world. All the money inflows (including the issuance of stock!) are counted as revenue and all the outflows, except dividend, are counted as expense. Because of this I'm of the opinion that dividends should be expenses too.
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Cian Kemp RJ: Cian Kemp CO: Cian Kemp Post Rating: 0 + / - Total Posts: 183 Karma: 58 Joined: Apr 9, 2012 |
Posted on May 5, 2012 Well, I guess it would encourage public companies to give good dividends as a way to dodge taxes. Investors would probably like it since they would get more dividends. On the down side, the "expense" would keep the company's stock price down.
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LP Paradoxian RJ: LP Paradoxian Post Rating: 0 + / - Total Posts: 18 Karma: 10 Joined: Apr 10, 2012 |
Posted on May 5, 2012 I honestly don't know how the stock market algorithm works but if profit is important issuing a huge chunk of new stock should increase the stock price, right? But afaik it doesn't.
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Cian Kemp RJ: Cian Kemp CO: Cian Kemp Post Rating: 0 + / - Total Posts: 183 Karma: 58 Joined: Apr 9, 2012 |
Posted on May 5, 2012 It actually does. That's a big problem with the market right now, and how so many people are raising billions of dollars by issuing shares. Buying up the stock makes the price go way up, then issuing more shares gives a ton of "profit" and the next day the price will climb steadily for a while. It will even keep climbing while you sell off the shares. I did that with KFC when I was tired of running it and wanted to sell it off. It climb to a high of $810 a share before I sold it off. That's also one of the reasons PROPHET is at 4700 a share right now. It's nuts.It also has a tendency to drop sometimes for no apparent reason. KFC dropped to a penny a share later and the current owner picked it up super cheap (it still had lots of cash laying around from the issue too). |
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Scott (Admin) RJ: Ratan Joyce CO: Ratan Joyce Post Rating: 0 + / - Total Posts: 1175 Karma: 5083 Joined: Jan 13, 2012 |
Posted on May 5, 2012 @ LPP You mean it SHOULD DECREASE the stock price?Cian got it right, that's the problem. |
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LP Paradoxian RJ: LP Paradoxian Post Rating: 0 + / - Total Posts: 18 Karma: 10 Joined: Apr 10, 2012 |
Posted on May 5, 2012 I guess the algorithm is a bit messed up :).The suggestion still stands, count dividends as expenses because all other inflows/outflows are counted as revenues/expenses. |
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Andrew Turner RJ: Thomas Lazygun Post Rating: 0 + / - Total Posts: 44 Karma: 26 Joined: Apr 9, 2012 |
Posted on May 5, 2012 Dividends shouldn't count as expenses for taxation purposes. Unless players as well as companies can get taxed.
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LP Paradoxian RJ: LP Paradoxian Post Rating: 0 + / - Total Posts: 18 Karma: 10 Joined: Apr 10, 2012 |
Posted on May 5, 2012 I agree under normal conditions. But the issuance of shares shouldn't be counted as revenue either. And the construction of buildings shouldn't all be put on the expenses side either because you can get almost all your money back by selling the building.But that's not the case in this game. All in and outflows are revenues and expenses. The only exception are dividends. That's why dividends need to be expenses for it all to make sense. |
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Scott (Admin) RJ: Ratan Joyce CO: Ratan Joyce Post Rating: 0 + / - Total Posts: 1175 Karma: 5083 Joined: Jan 13, 2012 |
Posted on May 7, 2012 And the construction of buildings shouldn't all be put on the expenses side either because you can get almost all your money back by selling the building.Thanks, I forgot about the construction/research/purchase counting as equity on the revenue sheet. |
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