Getting back to Don Phillips, he argues that Acela looses large amounts of money and that long distance trains loose far less than Amtrak claims.
OR
Don is clearly a writer with a strong liberal philosophy, who more times than not uses his page in Trains to rant about those who oppose dropping billions of dollars down the Amtrak sink hole. Don seems never to have met a government run passenger train he didn't like, and his article in June was a not very subtle jab at Amtrak intended to tell them to change their accounting methods to make gov't run passenger rail more financially attractive. Or more accurately, make it less financially unattractive.
John WR Getting back to Don Phillips, he argues that Acela looses large amounts of money and that long distance trains loose far less than Amtrak claims.
We never left Don Phillips.
He made an unsubstantiated assertion (not an argument) that Amtrak is under costing the NE Corridor and over costing long distance trains.
Some of us pointed out the great difficulty of "costing" services on rail networks as well as the corresponding difficulty of assigning revenues to match those costs.
I honestly doubt that Phillips knows enough to understand the subjectivity involved. He doesn't like the way the numbers now come out. So, like a child, he cries out to have the numbers changed.
And, naturally, at the end he takes a gratuitous swipe at people like me who see no reason for a Federal subsidy to passenger trains. He says we are "laughable". Well, he can write what he wants. But I see him as ignorant. (I can also write what I want.)
MikeInPlanoDon seems never to have met a government run passenger train he didn't like, and his article in June was a not very subtle jab at Amtrak intended to tell them to change their accounting methods to make gov't run passenger rail more financially attractive. Or more accurately, make it less financially unattractive.
When Don Phillips reports that the Acela in fact looses a lot of money and Amtrak covers up these loses I don't see this as reflecting his liking for the Acela.
Sam1 ...To know how Amtrak allocates its costs, one would have to be an insider or have an insider give him or her access to the company's books. As per the external auditor's report, Amtrak keeps its books in accordance with, "accounting principles generally accepted in the United States of America", which is frequently referred to as GAAP. It's standards, which are promulgated by the Financial Accounting Standards Board, are codified in FASB Statements, Interpretations, FASB Staff Positions, Technical Bulletins, and EITF Abstracts. These are the standards that govern Amtrak's accounting, although it may adhere to some government accounting standards. The implication that Amtrak's officers are unduly influencing the company's accounting procedures and practices, i.e. not following GAAP as well as governmental accounting principles where applicable, is not supported. The further implication that the external auditors from one of the world's most highly regarding accounting firms are turning a blind eye to these accounting irregularities is likewise without foundation. Amtrak follows the same accounting principles as every other stock company in the United States. That is not to say that they don't have some wiggle room in how they interpret and apply accounting standards, especially when it comes to estimates, i.e. depreciation, amortization, retiree benefits, etc., but any estimates that they use must be supported, and they must be consistent.
...To know how Amtrak allocates its costs, one would have to be an insider or have an insider give him or her access to the company's books.
As per the external auditor's report, Amtrak keeps its books in accordance with, "accounting principles generally accepted in the United States of America", which is frequently referred to as GAAP. It's standards, which are promulgated by the Financial Accounting Standards Board, are codified in FASB Statements, Interpretations, FASB Staff Positions, Technical Bulletins, and EITF Abstracts. These are the standards that govern Amtrak's accounting, although it may adhere to some government accounting standards.
The implication that Amtrak's officers are unduly influencing the company's accounting procedures and practices, i.e. not following GAAP as well as governmental accounting principles where applicable, is not supported. The further implication that the external auditors from one of the world's most highly regarding accounting firms are turning a blind eye to these accounting irregularities is likewise without foundation.
Amtrak follows the same accounting principles as every other stock company in the United States. That is not to say that they don't have some wiggle room in how they interpret and apply accounting standards, especially when it comes to estimates, i.e. depreciation, amortization, retiree benefits, etc., but any estimates that they use must be supported, and they must be consistent.
Multiple newspapers recently reported that Starbucks claimed zero profit in the UK for tax purposes by charging its UK operations with a large cost for licensing the Starbucks brand from its Dutch subsidiary and buying raw coffee from its Swiss subsidiary, wiping out what would otherwise have been a substantial profit (see http://latitude.blogs.nytimes.com/2012/12/12/after-avoiding-taxes-for-years-starbucks-has-become-a-target-for-london-protesters/). This defies common sense: does anyone believe that if Starbucks shut down all of its stores in the UK, its total global profit would not decrease? If its MBAs believe so, they should eliminate all those redundant retail outlets, expecting that magically the Dutch and Swiss subsidiaries will still show the same profit as before, even though they will no longer sell any raw coffee or intellectual property to the vanished UK subsidiary.
The motive for this accounting skulduggery is that profits are taxed at a lower rate in Switzerland and the Netherlands. I have seen no suggestion that the accountants have violated any rules, or that the auditors have given Starbucks anything besides a clean report.
This leads me to believe that Amtrak's accountants and auditors are perfectly capable of doing exactly what Phillips claims. I agree that Phillips doesn't give us enough information to judge for ourselves.
ecoli Sam1 ...To know how Amtrak allocates its costs, one would have to be an insider or have an insider give him or her access to the company's books. As per the external auditor's report, Amtrak keeps its books in accordance with, "accounting principles generally accepted in the United States of America", which is frequently referred to as GAAP. It's standards, which are promulgated by the Financial Accounting Standards Board, are codified in FASB Statements, Interpretations, FASB Staff Positions, Technical Bulletins, and EITF Abstracts. These are the standards that govern Amtrak's accounting, although it may adhere to some government accounting standards. The implication that Amtrak's officers are unduly influencing the company's accounting procedures and practices, i.e. not following GAAP as well as governmental accounting principles where applicable, is not supported. The further implication that the external auditors from one of the world's most highly regarding accounting firms are turning a blind eye to these accounting irregularities is likewise without foundation. Amtrak follows the same accounting principles as every other stock company in the United States. That is not to say that they don't have some wiggle room in how they interpret and apply accounting standards, especially when it comes to estimates, i.e. depreciation, amortization, retiree benefits, etc., but any estimates that they use must be supported, and they must be consistent. Multiple newspapers recently reported that Starbucks claimed zero profit in the UK for tax purposes by charging its UK operations with a large cost for licensing the Starbucks brand from its Dutch subsidiary and buying raw coffee from its Swiss subsidiary, wiping out what would otherwise have been a substantial profit (see http://latitude.blogs.nytimes.com/2012/12/12/after-avoiding-taxes-for-years-starbucks-has-become-a-target-for-london-protesters/). This defies common sense: does anyone believe that if Starbucks shut down all of its stores in the UK, its total global profit would not decrease? If its MBAs believe so, they should eliminate all those redundant retail outlets, expecting that magically the Dutch and Swiss subsidiaries will still show the same profit as before, even though they will no longer sell any raw coffee or intellectual property to the vanished UK subsidiary. The motive for this accounting skulduggery is that profits are taxed at a lower rate in Switzerland and the Netherlands. I have seen no suggestion that the accountants have violated any rules, or that the auditors have given Starbucks anything besides a clean report. This leads me to believe that Amtrak's accountants and auditors are perfectly capable of doing exactly what Phillips claims. I agree that Phillips doesn't give us enough information to judge for ourselves.
Starbucks is not breaking any laws. The ability to defer taxes on foreign income or avoid them altogether is sanctioned by America's tax laws and tax treaties with other countries. Whether the laws and treaties are good policy is another issue. By the same token the company's auditors are simply affirming that Starbucks, as well as others taking advantage of the same laws, are complying with them in accordance with the standards of GAAP and the International Accounting Standard Board.
Philips assertions are not supported. I wrote him a letter, as opposed to an email, asking him to tell me his sources and provide me with the accounting information. I have not heard from him.
Sam1 ecoli Sam1 ...To know how Amtrak allocates its costs, one would have to be an insider or have an insider give him or her access to the company's books. As per the external auditor's report, Amtrak keeps its books in accordance with, "accounting principles generally accepted in the United States of America", which is frequently referred to as GAAP. It's standards, which are promulgated by the Financial Accounting Standards Board, are codified in FASB Statements, Interpretations, FASB Staff Positions, Technical Bulletins, and EITF Abstracts. These are the standards that govern Amtrak's accounting, although it may adhere to some government accounting standards. The implication that Amtrak's officers are unduly influencing the company's accounting procedures and practices, i.e. not following GAAP as well as governmental accounting principles where applicable, is not supported. The further implication that the external auditors from one of the world's most highly regarding accounting firms are turning a blind eye to these accounting irregularities is likewise without foundation. Amtrak follows the same accounting principles as every other stock company in the United States. That is not to say that they don't have some wiggle room in how they interpret and apply accounting standards, especially when it comes to estimates, i.e. depreciation, amortization, retiree benefits, etc., but any estimates that they use must be supported, and they must be consistent. Multiple newspapers recently reported that Starbucks claimed zero profit in the UK for tax purposes by charging its UK operations with a large cost for licensing the Starbucks brand from its Dutch subsidiary and buying raw coffee from its Swiss subsidiary, wiping out what would otherwise have been a substantial profit (see http://latitude.blogs.nytimes.com/2012/12/12/after-avoiding-taxes-for-years-starbucks-has-become-a-target-for-london-protesters/). This defies common sense: does anyone believe that if Starbucks shut down all of its stores in the UK, its total global profit would not decrease? If its MBAs believe so, they should eliminate all those redundant retail outlets, expecting that magically the Dutch and Swiss subsidiaries will still show the same profit as before, even though they will no longer sell any raw coffee or intellectual property to the vanished UK subsidiary. The motive for this accounting skulduggery is that profits are taxed at a lower rate in Switzerland and the Netherlands. I have seen no suggestion that the accountants have violated any rules, or that the auditors have given Starbucks anything besides a clean report. This leads me to believe that Amtrak's accountants and auditors are perfectly capable of doing exactly what Phillips claims. I agree that Phillips doesn't give us enough information to judge for ourselves. Starbucks is not breaking any laws. The ability to defer taxes on foreign income or avoid them altogether is sanctioned by America's tax laws and tax treaties with other countries. Whether the laws and treaties are good policy is another issue. By the same token the company's auditors are simply affirming that Starbucks, as well as others taking advantage of the same laws, are complying with them in accordance with the standards of GAAP and the International Accounting Standard Board. Philips assertions are not supported. I wrote him a letter, as opposed to an email, asking him to tell me his sources and provide me with the accounting information. I have not heard from him.
I'll take that as agreement: despite everything you said about FASB, GAAP, the reputations of auditors, etc, it's entirely possible that Amtrak is doing exactly what Phillips alleges. And when you say "not supported", you don't mean "the evidence doesn't support what Phillips says", but rather you mean "in the absence of evidence, it's impossible to judge."
greyhoundsAnd, naturally, at the end he takes a gratuitous swipe at people like me who see no reason for a Federal subsidy to passenger trains. He says we are "laughable". Well, he can write what he wants. But I see him as ignorant. (I can also write what I want.)
I agree with you. You have a right to your opinion. And Don Phillips has a right to his.
It is possible that Amtrak is doing what Philips claims that it is doing regarding the allocation of costs. However, given the oversight controls associated with Amtrak, it is highly improbable. Again, Phillips does not support his view with any data. Absent that all he is offering is an unsupported opinion.
Anyone is entitled to his or her opinion regarding any subject. However, journalists have an ethical standard that requires them to support their views with facts or make it clear that they are offering a simple opinion.
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