This Is Why Tesla Should Answer Boring Questions [Bloomberg]
Bloomberg columnist Liam Denning expressed some surprised as to how Tesla’s gross margin improved despite sales going down in the first quarter. It involved some accounting sleight of hand:
One big factor was a change in how Tesla accounts for vehicles it leases. Whereas previously many of these would have been accounted for as operating leases, with much of the revenue deferred, they are now effectively accounted for as sales, but with a right of return.
Tesla cited this as a factor in last week’s release, but without details. The numbers in the 10-Q filing show that, stripping it out, the like-for-like automotive sales margin drops from the headline 18.4 percent to 17.1 percent. Underlying growth in sales was 11.2 percent, rather than the 25.9 percent the headline revenue figure suggested.
Someone in the finance department gets an A+ for that one.
Valeant Will Become Bausch Health Companies Inc. [VPI]
To those of us who remember this 8-K that, at the time, I called “an amazing feat in impregnable corporate argot,” Bausch Health Companies will always be Valeant Pharmaceuticals in our hearts.
Four Women Accuse New York’s Attorney General of Physical Abuse [TNY]
Eric Schneiderman resigned a few hours after this New Yorker article was published. Mr. Schneiderman’s career as New York Attorney General involved many tussles with the Big 4, including EY’s settlement over Lehman Brothers’ bankruptcy, a subpoena of PwC’s audit workpapers of ExxonMobil, last year’s hack of Deloitte, among others.
Deloitte plans $600m of cyber security spending [FT]
Speaking of that hack of Deloitte, if you recall, the firm failed to use two-factor authentication for its global email server, which helped grant access to the intruder. So naturally, the firm is spending over half a billion on its cybersecurity to get things up to snuff.
Previously, on Going Concern…
I wrote about my real fear in the aftermath of a massive cloud failure: old, crusty CPAs saying “I told ya so.”
In Open Items, someone is asking about assessment tools for hiring.
In other news:
- Comcast prepares all-cash bid to gate-crash Disney-Fox deal
- ‘World of Warcraft’ Currency Is Now Worth 7 Times as Much as Venezuela’s Cash
- Amazon’s Tim Sloan will be new CFO of Snap.
- Woman wins $1.2m on $18 Kentucky Derby bet
- Free Cone Day.
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