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Fabio Capello’s comedy version of Sydney Pollack’s classic film “Out of Africa” was complete and utter…

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So then, England’s football team are back home following their worst defeat in a World Cup ever.  As an Englishman, I care about this very much, but I’m trying to be brave about it.

Germany deserved to win.  They played better and importantly played as a team. England were fragmented and dreadful.

But the official score of 4-1 was rubbish.  The second goal went over the line by about a whole metre. Unfortunately, FIFA “disallowed” the goal because the linesman didn’t see it and they refuse to install goal line technology.  The official reason for this is that many countries can’t afford that technology, which is doubtless a fair argument.  But surely countries that can’t afford expensive “Hawkeye” style equipment that the major tennis championships use could still afford to pay a responsible person to stand by each goal line through the match and call when a ball goes over the line?  This feels like very poor judgement.

In the UK at the moment, we’re questioning three things in connection with the World Cup.

1.    How can England have been so bad? There are no immediate answers to that.

2.    How can FIFA possibly believe that their reputation can be held intact when they refuse to listen to the reasonable arguments of so many stakeholders?

3.    How is it that the England manager (Fabio Capello) can be entitled to a £12 million severance package if he’s fired next month?  His team’s performance was a dismal failure, so surely he should go.  £12 million is what’s technically known as “an awful lot of money to pay a loser”.

It feels to me that the Football Association in the UK could benefit from a reading of the ACCA paper P1 notes.  Executive remuneration being linked to performance and ease of firing a non-performing executive (Fabio Capello) and how to protect reputation (FIFA).

We’ll give them a course free if they want it.  They both need it.

Should Michael Jackson have had more of a bond with David Bowie?

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It’s one year since Michael Jackson died.  In the year since his death, his estate has made earnings of £670 million.

Given that he was allegedly in serious financial trouble at the time of his death, this must be the source of a certain amount of posthumous frustration to Mr Jackson.  His ability to spend the money has been significantly impaired in the period since the money started to roll in, on the grounds of his no longer being alive.

This is a quandary well known to many pop stars.  The murder of John Lennon in 1980 sparked a sudden and deep revival of his career.

I can’t help but wonder why none of Michael Jackson’s advisors pointed him in the direction of the Bowie Bond.

David Bowie issued bonds in 1990 that were secured on the future income to be earned from songs that he had written up until that date.  This is a simplification of course, but that’s the big picture.  By doing this, David Bowie was able to get the benefit of some of his post death earnings while he was still alive.  He is a smart business operator as well as enormously popular song writer, it seems.

The Bowie bond has been influential in business since it was issued.  In practice, I personally used it as the backbone of market data to help in the divorce settlement of another well known musician.

Its influence amongst accountants is significant, though less so with the pubic at large. Rock stars probably don’t shout about it because valuation and securitisation of intellectual property isn’t really very rock and roll.

An accountant can make 65 become 60 but it takes rather extreme measures.

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Ten years ago former accountant Mr. Christopher Timbrell became former accountant Mrs. Christine Timbrell.

Christopher had surgery to alter his gender and became Christine but still remained married to his wife, Joy.

Yesterday, three Appeal Court judges in the UK gave a ruling which links to a number of discrimination issues.

Under 2004 legislation, as a transsexual Christine is entitled to enjoy the full status of her gender. However, married transsexuals are only allowed to have their gender recognized if they dissolved their marriage. This is where the problem for Christine occurred as although she had the sex change operation she still remained happily married to her wife Joy and they didn’t get divorced.

This meant that Christine was still treated as a man for pension purposes and therefore became entitled to a pension at 65 rather than at 60 which is when a woman becomes entitled to a pension.

Christine argued that she was a woman and it was a violation of her human rights to be forced to get divorced to become entitled to a pension at 60. The three Appeal Court judges found in Christine’s favour and also added that she was a victim of discrimination.

Christine, aged 69 who has two children with Joy from before the sex change operation, will now receive backdated pension payments going back to when she was 60.

36 attractive Dutch ladies, Hugo Boss and an ambush. It’s all happening at the World Cup.

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So the World Cup is in full swing but what got all the publicity yesterday involved a team of attractive female Dutch fans rather than a team of footballers.

36 young blond Dutch fans wearing bright orange mini-dresses were removed from the stadium at half time and two of them were arrested and then released on bail.

But what exactly was their crime and why all the media attention?

Their crime was that they were alleged to be part of an ambush marketing campaign by Bavaria, the Dutch brewer.

Ambush marketing is where companies which are not official sponsors of tournaments aim to get their marketing message across without making any payment to the tournament organisers.

The mini-dresses the ladies wore were promotional dresses provided by Bavaria in the run up to the tournament and when they all started clapping and swaying in unison in these dresses they understandably attracted a lot of attention. Unfortunately for them this attention was not only from the world’s press but also FIFA representatives that were on the lookout for ambush marketing.

Anheuser Busch’s Budweiser is the official beer of the tournament and no other beer company is allowed to promote itself within World Cup stadiums. FIFA receive significant amounts of money from official sponsors and therefore are keen to protect their sponsors.

Another example of ambush marketing involving a major sports tournament was at the 2009 British Golf Open. Hugo Boss sailed its corporate sponsored yacht just off the coast of Turnberry, Scotland where the golf course was located.

As a result of this the BBC who were filming the golf had little choice but to show the Hugo Boss yacht in the background of a lot of shots. Great advertising for Hugo Boss!

Back to the Dutch girls and the 2010 World Cup though and it’s safe to say that whatever the outcome of this situation it’s no doubt been a success for Bavaria. More people have now probably heard of Bavaria beer as a result of the arrests than if the girls had just been left in the stadium to sway and clap in unison and enjoy the rest of the game!

How much would you charge for an hour of your time? £900,000 would probably be ok as long as lunch was included….

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It’s tough to qualify as an accountant. The exams are difficult and it’s hard work. The rewards, both financial and non financial however, can justify all of this hard work.

If you work for a firm of accountants then the fee income of the company is largely based on the hourly charge out rates of the employees. I’ve got a feeling though that no matter what your position is within your company you won’t be able to command a charge out rate of £900,000 per hour!

On Friday however a mystery individual paid $2.6 million (approximately £1.8m) for lunch with Warren Buffett, the 79 year old billionaire head of investment giant Berkshire Hathaway and world’s 3rd richest man.

Arguably the most famous and respected investor in the world, Mr. Buffett auctioned his time in aid of the Glide Foundation, a San Francisco charity . Assuming a 2 hour lunch the winning bid of £1.8m results in an impressive hourly equivalent of £900,000.

The winning bidder can take seven of his or her friends along to the New York steakhouse, Smith & Wollensky and are free to ask anything although Mr. Buffett will not be disclosing what he is buying or selling.

Of course, I’m also assuming that someone will make the reservation for the meal rather than risk turning up and not being able to find a table for 8 people as the restaurant is fully booked…

The “Princess and the Pea” is a famous fairy tale but should there be a new version called the “Princess and the Pound Notes”?

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Sarah Ferguson, the Duchess of York and former wife of Prince Andrew, has been in the news for all the wrong reasons.

Evidence came to light last week of the former member of the British royal family accepting money in used bank notes to arrange access to her husband ($40,000 as an initial payment of an agreed total of £500,000). Many people were shocked as taking money to arrange access to people in influence could look like corruption.

The Duchess of York (no longer referred to as “Her Royal Highness” following previous run ins with the more senior royals) may be in greater trouble than the public relations mire and financial trouble that she admits to being in.

If the Duchess was not planning to include full and frank disclosure of the cash received (or what some people may call “bribes”), she appears to have been engaging in activity that could look like money laundering. Accepting payment in notes and coins is often fairly good evidence of wanting to disguise the origin of the funds.

Now whilst money laundering shouldn’t normally be an issue for an ex-Princess, money laundering is big news for professionals, especially professionals practising in the European Union.  The EU’s third Directive on money laundering requires that all accountants and tax advisors are effectively trained in detection of money laundering.

Penalties for non-compliance with this can be severe. Money laundering, or facilitating money laundering, under UK law can carry a criminal sanction of two years’ jail time.

This could be an interesting bit of gossip to follow for students!  Maybe the Duchess should use some of those used bank notes to engage the services of a good lawyer?

So, how would you feel? Re-assured or spied upon? It’s a good ethical question.

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We mentioned in a previous blog about Nike publicising their CSR (Corporate Social Responsibility) policies on their website.

Asda, Britain’s second biggest supermarket chain has gone one step further in being transparent with regard to their CSR policies.

In the past they have been criticized by some campaigners for the low wages and poor conditions that were present at some of their clothes manufacturing locations in Bangladesh. Their company website states that as part of their efforts to increase transparency it has now put in webcams at two if its clothing factories in Bangladesh.

This should help reassure customers that they are treating their suppliers ethically and are not employing them under “sweatshop conditions”. The webcam shows clothes being made and you can clearly see the conditions that are present.

The supermarket chain has said that it has also installed webcams at its head office and at an automated cow milking machine at one of their suppliers.

Press reports however have indicated that not everyone is happy with the webcams with some people arguing that it is a case of spying on the workers as opposed to proving how ethical and transparent the company is. Either way, it’s certainly a novel way to utilise technology.

I guess the question we should be asking ourselves though is how would we feel if we had a webcam looking at us at our workplace – would we feel reassured or spied upon?

There’s trouble brewing with PESTEL

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Last week the UK chancellor unveiled his budget. The general consensus seems to be that it wasn’t a particularly exciting budget with the chancellor playing safe on most things.

What has caught the public eye though is the announcement that duty on cider (an apple based alcoholic drink) would increase by 10% above inflation. This would add approximately 5p to a litre bottle of cider. This has upset the cider drinkers and thousands have joined facebook groups hoping to get the decision reversed.

We mentioned the C&C group in a previous blog about spreadsheets. The C&C group own the Magners cider brand which is one of the best known cider brands in the UK.

The change in duty imposed by the chancellor is a classic case of how the “P” (Political) in PESTEL can impact on a company. Magners has reacted quickly to this though by launching  a press campaign saying that they will cover the increase in duty and will not increase their prices.

The C&C group may meet the “P” again soon though as there is discussion about the Scottish government introducing minimum unit pricing for alcohol in order to try to curb the health problems involving alcohol that are present in Scotland. The C&C group dominates the Scottish lager market with the brand Tennents.

So, if somebody asks you what is the link between cider, lager and PESTEL you now know the answer.

CIMA results and performance with a smile…

First of all congratulations to all CIMA students that received their exam results yesterday and were successful. Your hard work paid off so very well done! We’ve heard from a number of you that were successful and those are always the best type of emails to receive from students!

If your results weren’t as expected though and you didn’t pass then better luck next time.

Various papers have performance management within the syllabus. A rather unusual method of managing performance was recently reported by the press.

Japan’s Keihin Express Railway Co., in an effort to promote a friendlier customer service, has implemented something called “smile scanners” at its stations to assess the smiles of their employees!

Employees have to look into a camera every day and have their smiles scored by a computer that analyses their facial features and gives feedback. The quality of the smile is reportedly rated on a scale ranging from 100 to zero.

Is it effective? Can the scanner distinguish between an artificial and a genuine smile? The jury is still out.

While we at ExP love technology, we’re not sure we would submit to such assessment, at least not before our morning coffee!

Remember the short term and long term

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One item that people should be aware of is that management accounting and financial management are similar to the extent that they are both concerned with resource usage. But there are differences.

I was lucky enough to have recently flown on the new Airbus A380 super jumbo and that got me thinking about some of the financial management issues that Airbus face. Designing and producing the A380 must have been a phenomenal exercise and a real testament to man’s engineering skills. It’s capable of carrying over 800 passengers and has a range of nearly 15,000 km. It’s a fantastic machine.

But what has this all got to do with the difference between management accounting and financial management? One difference is that management accounting tends to deal in short-term timescales whereas financial management is generally more concerned with the longer term. Whilst the longer term is generally considered to be more than one year be aware that certain industries and companies have a distinctly longer “long-term”.

From inception to delivery the A380 took nearly 10 years and the long term view taken by Airbus is certainly longer than some businesses in for example the IT or fashion industries. Some of the businesses in these industries have distinctly shorter “long-terms”.

Anyway, despite the millions spent on design and development of the A380 there was one disappointing thing about my flight and that was I fell asleep during the film and missed the ending…