Thursday, January 8, 2009

THE BALANCE SHEET

I earn my daily bread by teaching my commerce students how to prepare a Balance Sheet, and - most importantly - how to tally it. You should see the the kind of excitement, joy and pride those students experience when their Balance Sheets tally in the class. The feeling is so mighty, that one who doesn't know what a Balance Sheet is all about - would think these students have just killed a man-eater. A lion!

Any commerce teacher, like me, will vouch for it!

It is only after they step out of their college, that they realise - that, it is not a big deal, not a rocket secience. That, your Balance Sheet can be designed - customised - the way you want it, and it suits you. Fatter, leaner or medium. Right, wrong or bogus. A hundred items you leave out, it will still tally. A hundred items you add, it will still tally. All that you should make sure is that" "For every debit, there should be an equal and corresponding credit."

Otherwise, it won't tally.

That's the 'great law' of of this rocket science called - 'Double-Entry system of Accounting'! The Italian genius, Luca Pacioli had fathered it, long, long ago.

Rest of the things - the fine art - about the Balance Sheet, we invented!

Don't' want to pay more tax? ( Who wants to? ) Keep away some of your incomes, or cook up more expenses, or ferry in some of your assets as expenses, or tow out some of your incomes as liabilities. That's all. Your Balance Sheet will still tally, and obediently.

If you do it intentionally, knowingly, to mislead some one - your I.T. officer or your competitor - your act is known as a 'Fraud'. Or, as that 'Watchdog', Auditor, howls in his language - 'Secret Reserves'.

If you do it unintentionally, in ignorance, by oversight, it is known as an 'accounting error'.

On the other hand, you want to show a 'rosy' picture - to impress your banker or the prospective investor - all that you have to do is: Jack it up, inflate it. Like, show more incomes, less expenses, or show your expenses as assets, or liabilities as incomes. That's all. The Balance sheet will faithfully tally.

Again, whether it is a 'Fraud' or an 'Accounting Error', that depends on your intention.

Our 'Watchdog', in his lingo, calls it 'Window Dressing'.

First, the students read about it in their class rooms. Then, in real life, they apply it.

We teachers, too.

The watchdogs, too.

The I.T. officers, too.

The text book authors, too.

The finance ministers, too.

Every body's Balance Sheet tallies. Only 'he' knows how it has tallied!

You doctors, please stop taking your dispensary collections in cash. If you do, show. And all!

You, the buyers and sellers of flats and bungalows, stop giving and taking cash on your transactions. If you do, show. And all!

Ditto for you all - the tuition teachers, maid servants, taxi and auto drivers, and you there, the beggars, even!

No 'offerings' in cash in temples, mosques, churches and Gurudwaras ...only cheques. Devotees please carry your cheque books when you pay a 'darshan' next time!

The Balance Sheet should tally, you see.

By hook, or by crook!

Why am I writing about - of all the things in the world - this piece of paper called 'Balance Sheet'?

Because, I feel 'sad' for Mr. Raju of Satyam. Sad for the way they are crucifying him for his 'sins' - of inflating his company's Balance sheets, for years.

Sad for that 'holier-than-thou' seat we have occupied, to nail him to the cross.

Like that 'good criminal' asked Jesus - when they were suffering and dying on the cross - to remember him ,that night, in heaven - I feel like asking Mr. Raju, to do the same.

In 'our' case, maybe - in hell!

Jesus might have been a 'holy man'. Mr. Raju is not. And, I am, most certainly, not.

I am Only a smaller criminal ... who tallies his smaller Balance sheets!


GERALD D'CUNHA

6 comments:

MACK said...

amesome blog, especially the last few lines...wow! your take on judgement is awesome!...keep up the good work, chao..
- Mack

Gerald D'Cunha said...

Hi Mac,

happy to read your comment. Pl. encourage ur friends to read then too, and ost comments.

You know, a young man like you realising how cruel and dishonest we all can be when we sit on the judgement seat - it gives me great delight!

Thanks,

GERRY

Anonymous said...

Hello Sir,
I have been reading your blogs since the time I spoke to you last, many of the questions what I ask myself at times, my worries for future, the question of time management, I seem to be getting a reply from the blogs, I read, they inspire me, each day. A teacher is always a teacher and I am glad to be in touch with my teacher after years of passing out and still learning, feel lucky and blessed.
Thanks
Kiran.

Gerald D'Cunha said...

Hey Kiran,

And what about a student? I think we are all students ... and will remain so, for ever. What looks like a 'teaching' on the surface, is just this: Our eternal quest!

Which you have so beautifully described in your comment.

Let's keep the quest on!

Pl. be in touch; Love to all at home ...

GERRY

Anonymous said...

Raju tallied a balance sheet that was only 3.6% his. In this he defrauded his investors and betrayed their trust.

Certainly, we all may be guilty of crimes to a lesser degree, but isn't that precisely the point? Raju's crimes were larger and impacted a very large population and hence his punishment (which includes the public crucifixion that you refer to) is correspondingly more intense?

After all, God gave us the power of intelligence, don't we do him a disservice by equating Raju's crimes with lesser ones?

Gerald D'Cunha said...

Hey Friend,

I liked the depth and the logic of your argument.

True, we are not as big as Mr. Raju as far as our crimes are concerned.

I was trying to touch upon these things:

Are we 'aware' of our 'clay feet', our 'glass houses' - when we indulge in judging others for their sins - however massive they may me?

How come Mr. Raju became a 'conman', now? Just because, his crimes surfaced, now?

So, we all are fine ... as long as we are not caught.

Whether big or small, we all have the same tendencies to 'escape' from our crimes ... as long as we can ... till, yes, till.

If I were caught, no body would know ... but, I would.

That 'impact' on my individual conscience - in my view - deserves the same 'public crucification'.

Till then, I am a hypocrite.

Keep giving your view points; they help.

Pl. mention your name ... We all are co-travellers, here ... None of us has 'arrived' ... None of us is a 'know-all'.

Let's grow together, beautifully.

Regards,

GERRY.