The Digital Skeptic: 'Trapped Cash' Stifles Global Economy
Here (on Page 8 of the FASB draft) is just one statute to give a flavor of just how south of the spirit of revenue recognition is for most international joint ventures: "When determining the transaction price, an entity would consider the effects of the following: (A) Collectability."
Now, I fully realize that what I am implying means all those sexy overseas joint ventures all those big global enterprises are waving around in front of investors will need to re-examined. And I understand I am implying a write-down of simply epic proportions. But investors wear the big-boy pants in this family, and it's time we put them on when dealing this "global economy" nonsense.
Think about it: If somebody from 35,000 miles away showed up in your backyard with a zillion bucks to spend on a "joint" venture, just how "joint" would you make that venture? Be honest ... you'd try to keep every last dime.
That means North American and European multinationals could be lucky to get pennies back on the dollars invested overseas. And markets go nowhere until that accounting reality shows up in everyone's books.
It turned out the world ain't flat. It's merely flat broke.