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re: Car dealers have so much backlog, some 2022s are "new"
Posted on 12/2/23 at 9:08 am to fallguy_1978
Posted on 12/2/23 at 9:08 am to fallguy_1978
quote:
I wonder why they don't sharply cut the prices? At some point just cut your losses and move on.
1) they do not want to lower the pricing floor as this will be going on again next year.
2) It is on the books as an asset and probably collateral, things can get messy when you choose to depreciate something(s) that is/are being used as a security deposit.
1
Posted on 12/3/23 at 6:31 pm to WhereisAtlanta
quote:Do you think the market value of the inventory is lower than the book value? Also, I’m no accountant, but I don’t think you depreciate inventory. I think you recognize the loss through a write-down. Seems like recognizing a loss is good for tax purposes.
2) It is on the books as an asset and probably collateral, things can get messy when you choose to depreciate something(s) that is/are being used as a security deposit.
No idea how financial covenants are written in security agreements for inventory collateral. It seems to me that refusing to recognize a loss on the collateral would be a breach of a financial covenant since your statements would no longer accurately and fairly represent the assets of the business.
This post was edited on 12/3/23 at 6:34 pm
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