Tag Archives: GAAP

Magic with Numbers!

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Albert Einstein and Stephen Hawkins were rank amateurs because they were handicapped by their pathetic math skills.

The real math pros are accountants.

As the old joke goes:
A businessman needed to hire someone who knew math. For the interview, he had written on a white board “2 + 2 =.” The mathemetician wrote “4,” as did the physicist. When an acountant arrived, he looked at the whiteboard, locked the door, checked to make sure the window was locked, and pulled the curtains. He leaned close to the businessman and whispered,
“What do you want it to be?”

Creative accounting requires more mental gymnastics than figuring out how the universe began or will end. Here’s a great example:

Forestt Gump, the movie, cost $55 million dollars to produce. It earned nearly $680 BILLION, but according to the accountants, it lost money. Some of the contributors (like author Winston Groom) had agreed to a percentage of the net profits. However, since it never made a dime, their share was zero.

Let’s review the math:

$679,850,637,000
–        $55,000,000
             ZERO*
* After depreciation, marketing, amortization, title, and dealer preparation charges–and other “Generally Accepted Accounting Principles”.

I didn’t include taxes, because if it “lost money,” I’m not sure whether or not they had to pay any.

Albert Einstein and Stephen Hawking, eat your hearts out!