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Newsgroups: rec.autos.sport.f1
From: Bobster <megap...@gmail.com>
Date: Fri, 12 Oct 2012 03:05:48 -0700 (PDT)
Local: Fri, Oct 12 2012 6:05 am
Subject: Re: Exactly how big was the McLaren fine in 2007?
On 12 Oct, 11:40, larkim <matthew.lar...@gmail.com> wrote:
> On Friday, 12 October 2012 09:39:15 UTC+1, Bobster wrote:
Ah! I'm no accountant. But in this case the FOM money was never going
> > On 12 Oct, 10:30, Bobster <megap...@gmail.com> wrote: > > > On 12 Oct, 10:26, Bobster <megap...@gmail.com> wrote:
> > > > On 12 Oct, 10:16, Noj <m...@privacy.net> wrote:
> > > > > $100m or £32m (I can't be arsed converting $ to £)
> > > > >http://www.autosport.com/news/report.php/id/103312
> > > > > Does this mean a speeding fine is tax deductable too ?
> > > > $200m BUT they didn't have to pay it all in cash. The amount of cash
> > > > they had to hand over to FIA was $200 less whatever they would have
> > > > got from FOM for the year. Which is still $200m lost overall, but they
> > > > didn't have to stump up $200m in one go out of their own bank
> > > > accounts.
> > > Bah! Sneaky 2 key crept under my fingers. Sorry... $100m, but not all
> > > payable up front by McLaren. $100m less the amount they would have got
> > > from FOM was what they had to pay out out of their own piggy bank.
> > Key point. The full $100m would not have been on McLaren's books. Part
> > of the fine was FOM money that was withheld and thus never entered
> > their accounting system.
> Not necessarily true. You record income when it is receivable, not when it is received. So I buy a widget from you for £1000 on 31st December, and we agree that you'll pay me on 30 day credit terms. Income = £1,000 for the year ended 31st December, but cash = £0 (debtors = £1,000). Next year if I sell nothing at all, income = £0, but assuming I pay you cash = £1000, debtors = £0.
to be receivable, and the exact amount still had to be calculated. I don't think there are any guarantees of a specific amount to a specific team. We know they'll get something (assuming they are not ejected from the championship) but not how much. > I would have thought that the contractual income due under the agreements would have been recorded as income, and the fine recorded as a cost, so that the net was shown overall in their accounts.
See above. The amount of FOM income is not known until the season is
concluded. Except, in 2007, McLaren knew they would not get a bean (but they didn't know that at the start of the season). > I suppose that the treatment of the cost as being tax deductible makes a little sense - it wasn't a "fine" in the criminal law sense, it was just a breach of a private commercial agreement. So in a similar way, if I charge customers a 5% surcharge for breaching their agreed credit terms, I would expect them to be able to treat the surcharge as tax deductible.
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