When I started my own business with an engineering background, I took the trouble to learn and do my own accountings. One of the most valuable skill in my toolbox ever since.

Under one of the allowable UK methods for subsidiaries the capital loss was taken via the P&L reserves in the balance sheet and bypassed the P&L. The accountants tried to solve this later by introducing the Statement of Recognised Gains and Losses but few people read it even so, let alone knew what it was trying to say. That's accountants for you!

There were similarities although quite a bit of Enron's loss was related to unhedged energy derivative bets. Cheers Tim.

He went to jail for theft of company assets. However the amounts involved were small compared to the amount the company lost on unhedged forex exposures via his main overseas operating company. Cheers TIm.

Excellent series of videos, thanks a lot. Enjoying your enthusiasm!

This is why you always need to look at the statement of comprehensive income!

You are great! I have learned so much from your podcast!

very interesting. Thank you so much for taking the time to publishing this videos. Greetings from Vienna, Robert Redl

Hey Tim, Which section of the balance sheet will we be able to spot the forex depreciation?

Correct - he wasn't. Tim.

Keep an eye on the balance sheet. Hmm but what am I looking for overtime...the slope of what item.. the annual to quarterly profit

Hi, tim, If possible, Could you do more case study just like this one. the case actually more interesting than plain theory.

Excellent video. Very well explained.

I'm sure there are many regional variations on this, but there's an old American saying, "There's a sucker born every minute, and two (born) to take him in, (take his money)".

That loss in translation when the lira dropped should have been put into a foreign currency translation reserve in the parent company's balance sheet..

Each and every video is awesome🔥🔥

Excellent Tim

Let's say the UK PLC has the loan as an asset in its books and the loan is a long term one. Then, while the borrower is paying the interest, the lender will keep the loan at its 100% value and the damage will be realized only once the borrower defaults. At the other hand the borrower investing overseas, if doesn't use a mark to market system and depending on the vehicle used to invest, could keep the value of the investment at face value as long as they investment is active.

Great stuff!

great as always

Love these videos

hey could have gone for currency forward to hedge currency risk

what if the investment was made in fixed assets, hedged against inflation. would they be hedge agaist depreciation too?

wasn't it the same at enron?

This is superb. Where is this guy today and does he still make videos?

depriciation on what? you don't usually write down firm values, don't you?

But how the investment value decreased and the forex loss not taken to the profit or loss. !

So why did the guy go to jail if he wasn't lying about the capital loss? did he mess with the balance sheets, or is it illegal to not tell people to look at the balance sheets?

Don't know how these so-called "professionals" attract millions of dollars to blindly gamble Vegas-style.

as you changed the ratio from 1 :1 to 1 : 2 than that means that the polly peck invested 10000 pounds which than turned to 20000 lira so 20 percent return rate should be 4000 lira and pound it should be 2000 which is same can you plz explain i didnt get it well

No Audio.

What he said

neden her yerdeyiz

We're ya coughed oot