Re: Synopsis of forces and events leading to '48-'50 styling
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Home away from home
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First off, not an expert on 1946 GAAP accounting however, expensing tooling costs for later production would be distorting period costs and not done. Normally, tooling costs with a useful life greater than one year are capitalized and expensed when used. The 21st series though had only seen use for the '41 and abbreviated '42 production cycles - that tooling would have been expensed then. If they were damaged during the war (as read here) and required reworking that would have been absorbed in '46 and for abbreviated production run in '47. The Ultramatic may have been treated as R&D expense and expensed as incurred in the current period - if it had an unknown future use / success. Just my two cents...
Posted on: 2020/3/24 10:51
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1948 Custom Eight Victoria Convertible
Others: 1941 Cadillac Series 62 Deluxe Convertible Coupe 1956 Oldsmobile 88 Sedan |
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Re: Synopsis of forces and events leading to '48-'50 styling
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Home away from home
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If Packard were not too concerned about propping stock price, it would indeed have been in their interests to expense as much as possible instead of amortizing the capital expenditure - this legally lowers taxes.
Posted on: 2020/3/24 11:41
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Re: Synopsis of forces and events leading to '48-'50 styling
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Home away from home
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One of the reasons why publicly traded companies are prohibited from using the cash basis of accounting - you can easily manipulate earnings. Packard's external audit firm would never have signed off on the financials if a material misrepresentation was being made. In this case it would have materially misrepresented the P&L... SEC doesn't like that. My employer is a multi-billion dollar private company, we love cash basis accounting..
Posted on: 2020/3/24 12:00
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1948 Custom Eight Victoria Convertible
Others: 1941 Cadillac Series 62 Deluxe Convertible Coupe 1956 Oldsmobile 88 Sedan |
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Re: Synopsis of forces and events leading to '48-'50 styling
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Home away from home
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I'm not suggesting anyone cooked the books, but there are times when it's a bit gray on whether an item is considered expense vs capital, or timeline for depreciation.
Posted on: 2020/3/24 14:02
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Re: Synopsis of forces and events leading to '48-'50 styling
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Home away from home
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I didn't think you were.. but in this case the black pen would go away and out comes the red, that moves the needle and in modern day accounting would be considered "cooking the books." It is a very gray area and one I deal with on occasion in my role and there are often misses caught at year-end by our auditors. Who knows in '46 it may have happened. Modern day GAAP was really only around 10 or so years at the time, I wasn't around.. nor my parents for that matter. The only way to know for sure would be to see the financial records if they exist. If the costs were associated with designing the 22nd series, that would fly but, any costs associated with a long-term production assets would not. I was once told accounting isn't a science it's an art, I will never forget that line...
Posted on: 2020/3/24 14:46
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1948 Custom Eight Victoria Convertible
Others: 1941 Cadillac Series 62 Deluxe Convertible Coupe 1956 Oldsmobile 88 Sedan |
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Re: Synopsis of forces and events leading to '48-'50 styling
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Home away from home
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So this one has me intrigued and have a theory: After the war they may have had substantial asset retirements from war production that became impaired with the close of the war. I would think any surviving minutes from the BOD at the end of '45 through '46 would discuss this if it was the case.
Posted on: 2020/3/24 15:58
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1948 Custom Eight Victoria Convertible
Others: 1941 Cadillac Series 62 Deluxe Convertible Coupe 1956 Oldsmobile 88 Sedan |
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Re: Synopsis of forces and events leading to '48-'50 styling
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Forum Ambassador
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All BOD minutes have survived, there are several sets of copies available within the Packard fraternity. Not at all suggesting it shouldn't be given a try, but from the few that I've read thru, they are remarkably sparse.
Posted on: 2020/3/24 16:14
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Re: Synopsis of forces and events leading to '48-'50 styling
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Home away from home
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The minutes of a BOD meeting and the detail of what goes on are two different things, I can assure you. The minutes are not false, but they are but an outline.
Posted on: 2020/3/24 17:11
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Re: Synopsis of forces and events leading to '48-'50 styling
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Home away from home
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That's a shame and actually surprising more in depth minutes weren't taken.
Posted on: 2020/3/24 17:12
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1948 Custom Eight Victoria Convertible
Others: 1941 Cadillac Series 62 Deluxe Convertible Coupe 1956 Oldsmobile 88 Sedan |
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