TSR TSR's Amazing Accounting Department

[Ralif Redhammer]

That head accountant’s mandate sounds like JIT (Just In Time) methodology. Which might work just fine for factory work, but here seems a bit misapplied.

When I was younger, I just assumed that TSR was this monolithic, infallible entity. But in hindsight it seems like, despite the golden years, it was actually always a few decisions or run of bad luck away from collapse.

 

[Myrdin Potter]

I am struggling with the accounting justification (and I am a pretty good accountant). Cash flow I can see if people were paid on completion as you are putting cash our well before receiving any cash. Otherwise there is no P&L impact if you capitalize the development costs and amortize over sales.

 

[AriochQ]

At first, TSR was run by gamers who knew very little about business. Later, TSR was run by business people who knew very little about gaming. Neither worked well.

 

[Sacrosanct]

The article is written in a very informal conversational style. Utilizing the more common usage seems appropriate.

Even in common usage, it's not right. It's like using "irregardless." I don't meant to pick on him; I love his work. But that's just one of my pet peeves, like people who mix up "their" "there" and "they're".

 

[Von Ether]

I am struggling with the accounting justification (and I am a pretty good accountant). Cash flow I can see if people were paid on completion as you are putting cash our well before receiving any cash. Otherwise there is no P&L impact if you capitalize the development costs and amortize over sales.

It seems the other guy was trying to reduce the overhead from storing something in the warehouse six months ahead - don't know if that's considered part of the development cost. As a project manager type, thought, I like the idea of the product wrapped up and waiting as the ramp up marketing phase gets the consumers ready.

Having ramp up marketing going on while the product is squeaking in under the wire sounds like too much of a gamble that deadlines get blown.

But over the decades, I've discovered that lots of private companies present a good facade to outsiders and the "grunts" on the bottom floor and then be a total teetering mess up at the top. And often the only clue anyone has is that one weird decision.

Even more bizarre the accountant made that demand and then never followed up the numbers and lading to see if that was actually getting done and how much it was saving the company. i.e. proof of his worth to the company. Where was TSR picking up these top-tier people?

I guess Ward was going for "Amazing" (those are air quotes) vs Amazing on that accountant's judgement call.

 

[Myrdin Potter]

It seems the other guy was trying to reduce the overhead from storing something in the warehouse six months ahead - don't know if that's considered part of the development cost. As a project manager type, thought, I like the idea of the product wrapped up and waiting as the ramp up marketing phase gets the consumers ready.

Having ramp up marketing going on while the product is squeaking in under the wire sounds like too much of a gamble that deadlines get blown.

But over the decades, I've discovered that lots of private companies present a good facade to outsiders and the "grunts" on the bottom floor and then be a total teetering mess up at the top. And often the only clue anyone has is that one weird decision.

Even more bizarre the accountant made that demand and then never followed up the numbers and lading to see if that was actually getting done and how much it was saving the company. i.e. proof of his worth to the company. Where was TSR picking up these top-tier people?

I guess Ward was going for "Amazing" (those are air quotes) vs Amazing on that accountant's judgement call.

If they were actually printing the books/boxes so far in advance, then I would have an issue as well. No need for inventory. I suspect “finished” means press ready in this case.

 

[Sacrosanct]

I am struggling with the accounting justification (and I am a pretty good accountant). Cash flow I can see if people were paid on completion as you are putting cash our well before receiving any cash. Otherwise there is no P&L impact if you capitalize the development costs and amortize over sales.

It could probably be related to how carrying costs into the next fiscal year could be impacted. I.e., if all of your costs are in one year, and all of your profits in the next, it might screw with things. Also, it sounds like he or she was wanting to go to more of a Just-In-Time process that is very popular.

 

[Myrdin Potter]

It could probably be related to how carrying costs into the next fiscal year could be impacted. I.e., if all of your costs are in one year, and all of your profits in the next, it might screw with things. Also, it sounds like he or she was wanting to go to more of a Just-In-Time process that is very popular.

If costs are all expensed when incurred (no capitalization), then maybe. If they are capitalized (and there is a good argument that they should be), then your point does not apply.

 

[Azzy]

Even in common usage, it's not right. It's like using "irregardless." I don't meant to pick on him; I love his work. But that's just one of my pet peeves, like people who mix up "their" "there" and "they're".

I direct you here.

One of the best take-aways is:

"But if you are the kind of person who cries out against this abomination we must warn you that people who go through life expecting informal variant idioms in English to behave logically are setting themselves up for a lifetime of hurt."

 

[Schmoe]

A company was working to build a revolutionary machine to build bridges. They spent a bunch of money designing and developing it until finally it was ready for the first field-test, but during the field-test the machine failed and fell into a chasm. So they rented a crane, drove it out to the chasm, winched up the machine, and then started to fix it at great cost and delay.

The CEO called a meeting and told everyone that this mistake was really costly, they needed to find a solution. The lead engineer said he thought he could fix it if they used higher-quality steel for the machine.
Several weeks later it was ready for the next field test, but yet again, the machine failed and fell into the chasm. So they rented a crane, drove it out to the chasm, winched up the machine, and then started to fix it at great cost and delay.

The CEO called another meeting and let everyone know that this was terrible, the company was in a bad situation, and they needed a solution. One of the software programmers spoke up and said that he felt the algorithms used to navigate across the chasm were faulty, and he would work on a fix. Several weeks later it was ready for the next field test, but yet again, the machine failed and fell into the chasm. So they rented a crane, drove it out to the chasm, winched up the machine, and then started to fix it at great cost and delay.

The CEO called another meeting, and he was livid. This was the last chance that they had, and if they couldn't fix it he'd have to shut the whole thing down. Everyone was silent as they racked their brains until finally, the head accountant spoke up. "I know what we can do! We'll buy our own crane!"