4 ms·
They could introduce some new GAAP rules like... Add 10% of the value of all inventory sourced outside North America as a "risk liability". Same for 10% of ye
by epicureanideal 7y ago
They could introduce some new GAAP rules like...
Add 10% of the value of all inventory sourced outside North America as a "risk liability". Same for 10% of yearly labor that's outsourced.
Basically find ways to make short term thinking visible in their financial reports, since that's what's measured and rewarded.
- Havoc 7y agoNot really an accounting issue & messing with those numbers to highlight a risk is just asking for trouble. Companies are required to disclose significant risks, but the quality of that disclosure...varies.
- epicureanideal 7y agoI suppose this is a useful way to use tariffs. Make production abroad slightly more expensive, or significantly more expensive for vital goods.
- dredmorbius 7y agoBase those premiums on verified actuarially based underwriting risk and you might be on to something.
- eru 7y agoCompanies are free to add them to their accounting already. Mostly these kinds of risk factors are mentioned verbally in their reports at the moment.
- dredmorbius 7y agoEntities tend strongly to externalise risks unless compelled to do otherwise. Insurance obligations -- auto, health, life, C&L, bonding, mortgage and title -- are generally required by or offered via third. parties. Sometimes governments, but often creditors, counterparties, employers, or other entities.
- eru 7y agoThere are true externalities in a car accident. If you have to shut down your business, that's mostly impacting your business in a very direct way.