DS Forums

 
 

When is one classed as profitable?


Reply
Thread Tools Search this Thread
Old 02-01-2017, 19:07
peter3hg
Forum Member
 
Join Date: Aug 2006
Posts: 1,795
Hello...when was the last time you worked?

Time cost employees will always ALWAYS make a profit, net maybe a different question, and where do HMRC enter into this question
Employees don't go on a balance sheet. They aren't an asset of the business as the business doesn't own them. The only very rare exception is when sportspeople are "bought" and their contract can go on the balance sheet and is amortised over the contract duration.
peter3hg is offline   Reply With Quote
Please sign in or register to remove this advertisement.
Old 02-01-2017, 19:07
tealady
Forum Member
 
Join Date: Apr 2005
Location: colchester
Posts: 15,350
On a balance sheet employees come under Liabilities: Wages payable etc
Well, only if you failed to pay them by the end of the month and had to accrue for the cost. Failing to pay people in a timely manner is a bad idea.
tealady is offline   Reply With Quote
Old 02-01-2017, 19:19
Eagle9a
Forum Member
 
Join Date: Jul 2004
Location: Scarborough
Posts: 18,762
Employees don't go on a balance sheet. They aren't an asset of the business as the business doesn't own them. The only very rare exception is when sportspeople are "bought" and their contract can go on the balance sheet and is amortised over the contract duration.
oh please please tell any employer that...and then run very quickly
Eagle9a is offline   Reply With Quote
Old 02-01-2017, 19:45
Keefy-boy
Forum Member
 
Join Date: Oct 2006
Location: Brighton, UK
Posts: 9,427
Total of Assets should equal Total of liabilities,
Nonsense. The difference between those figures constitutes the shareholders' funds which are essentially the retained profits or losses plus the share capital.

Where are you putting employees on that side of the equation?
Employees aren't generally treated as tangible or intangible assets on a balance sheet.
Keefy-boy is offline   Reply With Quote
Old 02-01-2017, 19:58
tealady
Forum Member
 
Join Date: Apr 2005
Location: colchester
Posts: 15,350
Nonsense. The difference between those figures constitutes the shareholders' funds which are essentially the retained profits or losses plus the share capital.
Sorry. Dangers of over simplification.
tealady is offline   Reply With Quote
Old 02-01-2017, 20:03
Eagle9a
Forum Member
 
Join Date: Jul 2004
Location: Scarborough
Posts: 18,762
Nonsense. The difference between those figures constitutes the shareholders' funds which are essentially the retained profits or losses plus the share capital.

Employees aren't generally treated as tangible or intangible assets on a balance sheet.
and back to the original post.

I despair again, having worked in the finance/hr industry for as long as my hemorrhoids can remember...why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan
Eagle9a is offline   Reply With Quote
Old 02-01-2017, 20:07
tealady
Forum Member
 
Join Date: Apr 2005
Location: colchester
Posts: 15,350
why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan
EDIT: Way off topic now for the the OP who earlier said
"My heads spinning so will reread your reply a few times until something clicks."
tealady is offline   Reply With Quote
Old 02-01-2017, 20:22
Maxatoria
Forum Member
 
Join Date: Apr 2011
Posts: 10,733
and back to the original post.

I despair again, having worked in the finance/hr industry for as long as my hemorrhoids can remember...why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan
A person is not property at least since they banished slavery and thus can decide to leave employment at their choice. People get paid for the work they do and thus its a mention in the accounts under the correct area.

Its like the buildings worth 50 million but Darren the guy who empties the bins isn't worth a mention on the company accounts as he only earns 10k a year and thus gets merged into the "salaries" section.
Maxatoria is offline   Reply With Quote
Old 02-01-2017, 20:25
peter3hg
Forum Member
 
Join Date: Aug 2006
Posts: 1,795
and back to the original post.

I despair again, having worked in the finance/hr industry for as long as my hemorrhoids can remember...why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan
I tired to explain it before. The company doesn't own its employees so they can't be an asset. You could have a fantastic employee who contributes massively but you can't stop then walking out the door and never returning, therefore they can't be classed as a financial asset of the company. Some sportspeople's contracts can be capitalised as an asset as there is value in the contract that can be sold but this is a very rare exception.
peter3hg is offline   Reply With Quote
Old 02-01-2017, 23:21
Eagle9a
Forum Member
 
Join Date: Jul 2004
Location: Scarborough
Posts: 18,762
I tired to explain it before. The company doesn't own its employees so they can't be an asset. You could have a fantastic employee who contributes massively but you can't stop then walking out the door and never returning, therefore they can't be classed as a financial asset of the company. Some sportspeople's contracts can be capitalised as an asset as there is value in the contract that can be sold but this is a very rare exception.
I do hear and understand what you are saying but....lets take an example

Plumers Inc own a van, a bag of spanners and have one employee. The van is worth £3000, the bag of spanners £500 and the employee nothing. Ergo the value of the entity is £3500.
But Plumers Inc is actually turning over £80,000 a year, how can that be? the income is derived from an asset that on your books dosent exist, so what is the value of Plumers Inc?
Would you sell me Plumers Inc for £3500?
Eagle9a is offline   Reply With Quote
Old 02-01-2017, 23:34
swingaleg
Forum Member
 
Join Date: Nov 2002
Posts: 76,804
I do hear and understand what you are saying but....lets take an example

Plumers Inc own a van, a bag of spanners and have one employee. The van is worth £3000, the bag of spanners £500 and the employee nothing. Ergo the value of the entity is £3500.
But Plumers Inc is actually turning over £80,000 a year, how can that be? the income is derived from an asset that on your books dosent exist, so what is the value of Plumers Inc?
Would you sell me Plumers Inc for £3500?
the difference is the goodwill of the business which is an asset that can be valued in terms of expected sales
swingaleg is offline   Reply With Quote
Old 03-01-2017, 01:58
5hane
Forum Member
 
Join Date: Jun 2007
Location: The sane side of the pond
Posts: 1,481
Do the course asap, in business you need to know the difference between gross and net profit....you also need to appreciate what you your balance sheet is and what your p&l account means.

Historical reference which will prove invaluable......look at the Polly Peck accounts for the 3 years prior to dissolution
I Google Net & Gross whenever I need a reminder of the difference.
5hane is offline   Reply With Quote
Old 03-01-2017, 08:46
tealady
Forum Member
 
Join Date: Apr 2005
Location: colchester
Posts: 15,350
I do hear and understand what you are saying but....lets take an example

Plumers Inc own a van, a bag of spanners and have one employee. The van is worth £3000, the bag of spanners £500 and the employee nothing. Ergo the value of the entity is £3500.
But Plumers Inc is actually turning over £80,000 a year, how can that be? the income is derived from an asset that on your books dosent exist, so what is the value of Plumers Inc?
Would you sell me Plumers Inc for £3500?
You should start your own thread and not hijack the OPs.
tealady is offline   Reply With Quote
Old 03-01-2017, 10:23
swingaleg
Forum Member
 
Join Date: Nov 2002
Posts: 76,804
You should start your own thread and not hijack the OPs.
harsh !

the topic is opening out a bit which is fair enough

poor old Eagle seems to be getting a lot of stick lately !...............
swingaleg is offline   Reply With Quote
Old 03-01-2017, 13:04
walterwhite
Forum Member
 
Join Date: May 2012
Posts: 21,721
oh please please tell any employer that...and then run very quickly
What on earth are you on about?

Employees don't have a value for accountancy purposes. End of.
walterwhite is offline   Reply With Quote
Old 03-01-2017, 13:05
walterwhite
Forum Member
 
Join Date: May 2012
Posts: 21,721
and back to the original post.

I despair again, having worked in the finance/hr industry for as long as my hemorrhoids can remember...why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan
What other countries are you aware of tthat are valuing employees in their accounts?
walterwhite is offline   Reply With Quote
 
Reply




 
Forum Jump


All times are GMT. The time now is 11:04.