Even if this isn't Enrony, this sounds so Enrony (if you know anything about the Enron accounting scandal)
"How Microsoft has managed to avoid disclosing such basic details is baffling. The company in its financial reports identifies OpenAl as an equity-method investment. That means OpenAl, by definition, is a related party of Microsoft under the accounting rules. Microsoft, however, doesn't identify OpenAl in its financial reports as a related party, and doesn't say anything about its transactions with OpenAl in its related-party disclosures."
If its equity accounted it won't be considered a related party as far as I understand. Related party in IFRS isnt what you think it is. Its the equivalent of "extended family".
https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/fin...
26.5 Common related party transactions
In order to comply with the related party disclosure requirements, a reporting entity must identify all of its transactions with related parties.[…]
26.5.1 Disclosure of related party equity method investments
Equity method investees are, by definition, related parties of the equity holder.
It's not a related party that's the point.
“Equity method investees are, by definition, related parties of the equity holder.” suggests otherwise. You may need to elaborate your point.
AFAIK Microsoft didn't put any kind of liquid money into OpenAI, it's something like "you can use up to nB USD of our resources for free", not sure how that should go into accounting. It could even be a liability without much juggling.
Yeah, Enron didn't really put any money into its related parties, it just used to them to move things around. I don't think it is Enron, but related parties shenanigans give me the chills.
Accounting mostly focuses on the value of things, not “liquid money.”
A cash-flow statement does exactly that.
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IANAA, but AFAIK income from bartering is taxable on the basis of the fair market value of the goods or services bartered at the time of exchange.
Yes. You don’t need to be moving $ to have a profit or loss. You could take your salary in sacks of potatoes. You still owe the government taxes on the fair market value of your pile of potatoes.
A while back there was a big fuss because executives were caught not paying tax on the fair market value of extra perks they were getting like use of the corporate jet on the weekends for trips to the beach house. Anything that’s not purely a business expense is considered compensation and is taxable.
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A play about Enron's financial scandal was recently back showing in London.
Feels somewhat prescient.