“I’ve done it. I’ve finally realised the asset and it’s over.”

Rick was glad. Tom had been shouldering significant impairment loss for some time and really needed to restructure administrative arrangements as he was risking his liquidity.

“Any transaction costs?” Rick asked concerned his mate might have entered an onerous contract.

“No,” Tom replied. “I made sure we kept separate vehicles so there’s no need to unbundle. It’s all good. She was losing her net market value anyway.” Rick agreed.

Rick and Tom had been friends since first day at primary and graduated uni the same day as well. Rick went into the public service and Tom, a national accounting firm. Both careers were flourishing and they were well on their way to reaching their goals. Their meeting every second Friday night for a beer or two happened whether they were leased or not. It was vested.

“I always get hooked by their presentation currency. Especially if none of her assets are intangible. But my last asset’s operating cycle was way too long. I’m all for an orderly transaction but I have my limits. I was way past due so our solvency was brief.” Rick reminisced somewhat bitterly.

Tom, feeling a need to vent building replied “Yeh, if the inputs and outputs aren’t probable there’s very little intrinsic value, at least at first. Then, after a while, they think they have removal rights over you and, all of a sudden, you’re a subsidiary.”

“Which,” added Rick also warming to the subject, “is bearable if the discretionary participation benefits are more profit than loss – otherwise – forget it.”

“Absolutely” said Tom. “Too right” said Rick and they chinked their glasses celebrating their total agreement. “We should get a risk premium.” said Rick and they both laughed.

Across the crowded bar from Rick and Tom were Claire and Anne. They had been friends since Claire’s first day three years ago at the accounting firm were Anne worked and they too were deep in conversation about relationships.

“Can you believe Judy is entering into a joint arrangement.” said Claire.

“Really? When’s the settlement date? Does he have any biological assets, or should I say liabilities?” Anne chuckled then went on. “Is he the same guy who overestimated his net worth and was found to have an interest in another entity? If I found I was not the sole proprietor, I would liquidate the asset very quickly indeed.” she finished airily.

“Are you forgetting I was recently terminated for a similar reason?” Claire said indignantly. “He said my non-controlling interest in his brother was the problem. Gosh, it was only the one time and hardly rated as equity anyway. And besides, he was clearly suffering from an outstanding claims liability and his qualifying assets always took too long.” she added with purring satisfaction.

“I think men have very little residual value if they can’t meet their performance obligations, conditions and targets.” stated Anne emphatically.

“Yes,” agreed Claire. “If, after a suitable orderly transaction period has lapsed and they are found to be more form than substance then their useful life is over and they should be written off.”

“I agree with you totally and would add that no provision for termination benefits be made.” said Anne and smiled as she raised her glass. Claire mirrored the action but before tipping her glass to touch Anne’s, she wistfully added “If only they came with a weather derivative.” They both sighed.

Then suddenly, as can sometimes happen in a crowded room, the people parted and Rick locked eyes with Claire and Anne locked eyes with Tom and both instantly dismissed the other as each clearly had prior period errors and were definite non-performance risks.

By Rose Hopwood from Australia



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