31–40 of 590 posts
I can't recall the exact company name (Edit: it was TCI), but this was a smart accounting move that made one of the big US telcos frogleap the competition in the race for connectivity. Basically, the company invested sufficient into long term assets, big infra investments like cabling, towers, etc. Because of accounting rules, they could choose to amortize all of that investment in a straight line over 30 years, OR a…
If you struck gold, don’t stop digging. If you hit growth, don’t stop reinvesting.
Any game has an inherently limited and temporary TAM, unless you can license the engine to other companies.
Where is the money coming from if they are not profitable?
It's an accounting trick. 1) Make tons of cash. 2) Invest the cash back in the business. 3) Record this investment on the financials as an expense. 4) The expenses inflated by investment spending means you declare no profit and probably pay no tax on that profit you just hid. The alternative is: 1) declare profit 2) Pay tax on it 3) Reinvest what's left after the taxman took a cut. Which would you choose if you were…
Earlier quoted context omitted.
It's an accounting trick. 1) Make tons of cash. 2) Invest the cash back in the business. 3) Record this investment on the financials as an expense. 4) The expenses inflated by investment spending means you declare no profit and probably pay no tax on that profit you just hid. The alternative is: 1) declare profit 2) Pay tax on it 3) Reinvest what's left after the taxman took a cut. Which would you choose if you were…
Sorry but I'm an accountant and I can't abide such a terrible and incorrect description of how this works. Dunning Kruger in full effect on HN today.
I can't recall the exact company name (Edit: it was TCI), but this was a smart accounting move that made one of the big US telcos frogleap the competition in the race for connectivity. Basically, the company invested sufficient into long term assets, big infra investments like cabling, towers, etc. Because of accounting rules, they could choose to amortize all of that investment in a straight line over 30 years, OR a…
(I learned about it from HN here a couple days ago: https://news.ycombinator.com/item?id=41263855)
2018 but its still worth listening to.
https://ecorner.stanford.edu/podcasts/when-the-platform-is-y...
I can't recall the exact company name (Edit: it was TCI), but this was a smart accounting move that made one of the big US telcos frogleap the competition in the race for connectivity. Basically, the company invested sufficient into long term assets, big infra investments like cabling, towers, etc. Because of accounting rules, they could choose to amortize all of that investment in a straight line over 30 years, OR a…
John Malone at TCI? (I learned about it from HN here a couple days ago: https://news.ycombinator.com/item?id=41263855 )
I read this in a book over 10 years ago, and now 2 articles about the same trick within the same week.