This may be the week IFRS dies, so I’m going to the movies…

This is the 503rd post on this blog…

…and if Trump wins on Tuesday, it might be the last. Because there’s no point maintaining a blog on IFRS, if IFRS is dead. Oh, of course the death of IFRS, just like that of so many things, won’t be immediately apparent; probably not for decades. But if Trump wins, it will only be because of an abject mass surrender to blindly ugly short-termism, a rejection of science and governance and of rationality itself, aided by a malfunctioning democracy and widespread mendacity, and after four more years of that, I don’t believe there will be a way back, nor a way of containing Trump’s poison within America’s ignorance-splattered borders. As the poison and its consequences spread, any concept of informed long-term decision-making will be increasingly futile – the only game remaining, as David Attenborough’s grimmest projections come to pass, will be to grab whatever piece of the shrinking spoils one can get, and sophisticated financial reporting will hardly be necessary for that. So IFRS will be doomed, and those of us who continue to make a living out of it during its dying days might as well be zombies, lurching through a degraded landscape…

All right. Well, I think I’ve made my views clear enough. Let’s talk about something else. Someone asked on Twitter about whether there’s a show “that is the equivalency of Suits / the good doctor,” but about accountants. In response, someone provided the following:

  • Here is a few: 1. The Big Short 2. Margin Call 3. Too Big to fail 4. The Accountant 5. Wall Street Money never sleeps 6. Boiler Room 7. Other People’s Money 8. Equity 9. Rogue Trader Unfortunately they are more related to Financial Engineering…

An entertaining enough list, but that last comment is correct – accountancy hasn’t often caught the attention of film directors, and I can’t at this moment recall a movie which even mentioned IFRS in passing (by the way, some years ago, I wrote about The Accountant here). But here are three enjoyable reference points.

One of my favourite sort-of accounting scenes in a movie comes from Fritz Lang’s 1938 You and Me, in which a character played by Sylvia Sidney sets out to convince a group of inadequately reformed hoodlums (George Raft among them) that crime doesn’t pay. Using a blackboard and chalk, she methodically sets out how the anticipated take from their latest foiled heist, estimated at $30,000, after adjusting for the fence’s percentage and such expenses as getaway cars and informants, nets down to a mere $133.33 per participant, a pathetic return on the risk and effort involved. She’s convincing too, so that by the end of the movie they’ve given up crime, becoming no more than a bunch of benevolent softies. Even now, it stands out as a rare example of a movie slowing down to illustrate the mechanics of accounting yielding an actual human outcome.

The only musical that I think culminates in an accounting-related song is the 1957 The Pajama Game, in which factory workers’ quest for a 7.5 cent hourly raise culminates in the joyously-staged “Seven and a Half Cents” number. The song starts with a character called “Prez” proclaiming “I figured it out! I figured it out! With a pencil and a pad I figured it out!” and then going on:

Seven and a half cents doesn’t buy a hell of a lot,
Seven and a half cents doesn’t mean a thing!
But give it to me every hour,
Forty hours every week,
And that’s enough for me to be living like a king!

Prez figures out that in just five years this amounts to: “Let’s see…that’s 260 weeks, times forty hours every week, and roughly two and a quarter hours overtime.. at time and a half for overtime! Comes to exactly.. $852.74!” Enough to get, among other things, an automatic washing machine, and a year’s supply of gasoline. From there the song leaps to figure out the total for ten years and twenty years, with exciting if probably even then overstated estimates of what such money can buy. Terrific stuff!

A lesser-known Michael Caine film, the 1977 Silver Bears, revolves around control of a Swiss bank and of its one major investment, in an Iranian silver mine. It’s mentioned numerous times (as a key plot point) that this asset is carried on its balance sheet at $20 million, the amount advanced in the form of a loan, but we also know that the terms of the investment entitle the bank to 50% of the mine profits, such that its fair value has to be much higher. In other words, if IFRS had been effective in 1977, the plot of the movie would necessarily have been different. For another interesting angle, the “audit” report drawn up to support the sale of the bank characterizes the investment as relating to oil rather than to a silver mine, a misstatement that ultimately lands its author in jail. Oh, and (spoiler) it turns out there’s no silver mine anyway. All most enjoyable…

Well, that’s it then.

The opinions expressed are solely those of the author

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