Corporate Misinformation: The Understated Assets

In the course of doing business our corporations have at their disposal any number of ways in which the value of assets are reported. Some of the wealthiest of the taxpayers also have this ability to do so as well. In the long turn, this ability actually helps the corporations to become more profitable and the wealthiest among us to keep their income at a higher level.

While this seems logical, look at the point where the value of these stated assets reach zero or no more value. If this were truly the case then the costs associated with these assets would no longer be consistently added as part of the production costs. Our country can no longer allow this practice to keep going as it currently is being applied to production costs.

Once an asset reaches the “no value” or “zero sum” then this production cost should be eliminated. In actual fact, the known business and corporate models keep the production costs artificially high by not repricing the production costs associated with manufacturing and production even when this asset or any associated asset is devalued to a “zero sum” or “no value”. All along the way the costs are always raised but rarely lowered even when the payouts for these assets are devalued. A prime example is the power lines and telephone lines that enter most every house and entity. While the power lines and associated equipment are either replaced or upgraded, the costs for either is simply added on top of all other costs associated with these applications.

We have plenty of need in our country for the real and actual costs to be recovered but not for recovery of the actual costs to become a permanent part of the production to infinity after assets have had costs recovered and paid by the consumer(s) via write-offs and/or recovered through billing cycles.

Look at the medical equipment used by the various hospitals and medical communities. Once the equipment costs are recovered through use by the consumer, the costs associated with this equipment for the consumer never goes down and usually goes up even after the asset or equipment is paid for or devalued through depreciation. When will the average consumer be made whole again? The corporate entities simply don’t think that the consumer is intelligent enough to realize just what is really driving all costs up and never to become a level field where costs are adjusted to reflect reality.

In this message, the corporate entities need to be prodded into making a more open pricing policy based in reality rather than the greed to get more profit for themselves. If these corporate entities were based in reality, then the policy of pricing the actual production costs could be communicated better to reflect the world around them.

One example of this pricing is the cost for a minute of long distance phone calls. In the past it varied from one company to another and still does but today more competition has leveled this particular area to make less expensive time from one company to another. This is called competition and it works fine in the reality of our world.

Corporations and most businesses still are in existence to make a profit but still have obligations to the share holders and investors of the entity as well as its fiduciary responsibility to the consumer at large. While these responsibilities seem to conflict, they are not exclusive from the others. Our corporate entities will need to be better governed by the people holding the corporate offices and the regulators whom need to be more in touch with the reality of the consumer beyond the entity itself.

We find now that even with all of the stimulus funding that was given by our government to some of these corporate entities, they still want “no responsibility” as to how the past governance caused the problem they face and and have faced in the past. We still find from all kinds of sources that some of these entities were using the supposed stimulus funds to expand the entity itself rather than make the usage of the funds more transparent and realistic value to the entity.

Only time itself will tell if this type of “Corporate Governance” is conducive to a business model based in reality rather than the fact of “get all you can from the consumer” model for business.