A Question for The Accountants (7 Viewers)

[Grendel]

I am interested in a hypothetical situation here. If you have a business and you have another business that we are told is totally independant from the first and they ask you to get a loan for them for £14 million over 40 years and you managed to source this at 4.8% per annum would you advise your client to do this business and charge the totally independant business 5.0% per annum?

I today ran this by my accountant and he laughed his head off and said we all know the answer to that.

Now I did post this earlier and it was removed as people thought it was inappropriate on a thread which was heaping praise on an accountant. I would really appreciate the accountants view on this. If it contradicts mine I may seek a new one.

 

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[The Gentleman]

I am interested in a hypothetical situation here. If you have a business and you have another business that we are told is totally independant from the first and they ask you to get a loan for them for £14 million over 40 years and you managed to source this at 4.8% per annum would you advise your client to do this business and charge the totally independant business 5.0% per annum?

I today ran this by my accountant and he laughed his head off and said we all know the answer to that.

Now I did post this earlier and it was removed as people thought it was inappropriate on a thread which was heaping praise on an accountant. I would really appreciate the accountants view on this. If it contradicts mine I may seek a new one.

You interested in buying the Ricoh?

 

[Grendel]

You interested in buying the Ricoh?

Are you an accountant? This has nothing to do with buying the Ricoh it is a question of what an accountant would advise a business to do in terms of lending funds to another totally independant business?

 

[dongonzalos]

One business totally independent of the other?

Not sure if you seeking advice on your financial management has a place on a sky blues talk forum.

I would be surprised if this does not go the same way as your last attempt.

 

[The Gentleman]

Are you an accountant? This has nothing to do with buying the Ricoh it is a question of what an accountant would advise a business to do in terms of lending funds to another totally independant business?

Nooo really? and I was dead serious too about you buying it.

 

[Grendel]

One business totally independent of the other?

Not sure if you seeking advice on your financial management has a place on a sky blues talk forum.

I would be surprised if this does not go the same way as your last attempt.

Oh so if an accountant said they were independent would you not agree with that? You see I am surprised when an accountant breaks down finances and gives an opinion there was little opinion given on this fact.

 

[Huckerby]

Grendel you're the most boring person on this forum

 

[Rusty Trombone]

In a hypothetical situation where the companies are not linked in any way, then it doesn't appear to be a good deal for the company lending the money. Not enough return for the risk. Obviously you know this anyway.

It was possible a few years ago to get a loan from a bank at a low rate and then invest at the same bank at a higher rate. I'm not suggesting that this is, or was, a great plan.

 

[King of the Lesbians]

I am interested in a hypothetical situation here. If you have a business and you have another business that we are told is totally independant from the first and they ask you to get a loan for them for £14 million over 40 years and you managed to source this at 4.8% per annum would you advise your client to do this business and charge the totally independant business 5.0% per annum?

I just ran this by my accountant also. He said "bite me". Think I may sack him...

 

[Grendel]

Grendel you're the most boring person on this forum

Sorry I will just "like" all the popular people's posts from now on -- I am sure that will make me more interesting.

 

[dongonzalos]

In a hypothetical situation where the companies are not linked in any way, then it doesn't appear to be a RELEVANT in anyway.

 

[Huckerby]

Sorry I will just "like" all the popular people's posts from now on -- I am sure that will make me more interesting.

find it hilarious that you think "popular" even exists on an internet forum ointlaugh:

 

[letsallsingtogether]

You are a angry man(breath in breath out).

Maybe when the Accountant gets those other accounts he may answer them.

Sorry if Sisu/avro /whatever they call themselves this season accounts have not gone the way you had hoped.

So you asked your accountant today? and you have the Gaul to call me a bullshitter.

 

[Grendel]

find it hilarious that you think "popular" even exists on an internet forum ointlaugh:

It certainly does on here -- that is why my initial post which was in an existing thread was removed.

 

[Grendel]

You are a angry man(breath in breath out).

Maybe when the Accountant gets those other accounts he may answer them.

Sorry if Sisu/avro /whatever they call themselves this season accounts have not gone the way you had hoped.

So you asked your accountant today? and you have the Gaul to call me a bullshitter.

Yes I have asked him, what's odd about that? Everyone does a tax return - though clearly in a jokey way as we all know the answer don't we? No anger by the way -- just interested in a response.

 

[Nick]

I asked for this to be seperate from the OSB thread, no harm in asking a question is there?

Hopefully OSB or another accountant can reply.

 

[Grendel]

I asked for this to be seperate from the OSB thread, no harm in asking a question is there?

Hopefully OSB or another accountant can reply.

To me if the interest rate was really only 0.2% difference (and that was only gleaned from the thread) then there is every reason to ask it. If the loan is over 40 years it means that the total repayment is £32 million at 5%. Is the council loan repayable over the same period or is that shorter? Would a company take such a long term liability when making such a tiny percentage profit per annum? In a real commercial environment is that a good arrangement?

 

[dongonzalos]

Can I ask what us the going rate for an accountant to sort out your tax returns?

Nick no offence taken if you want to separate the thread.

 

[derbyskyblue]

To be fair grendel makes a fair point........

 

[dongonzalos]

How are we told they are COMPLETELY independent?

 

[smouch1975]

Sorry. Are you saying the council has borrowed at 4.8% and is on lending at 5.0%? Seems like a good deal for CCC and if ACL couldn't find better than 5.0% in the open market. Then good for them also. Yes?

Or am I way off? Or is it the 0.2% the council is scrapping that you are trying to highlight here?

 

[skybluetony176]

I thought your accountant had already given you the answer. If you don't trust him I would suggest that the yellow pages would be a more suitable place to locate another.

 

[tisza]

Grendel any chance you can ask your accountant what he thinks about ARVO continuing to lend money to a business with seemingly little in the way of fixed assets albeit at an interest rate way over 5%?

 

[Jim]

Given that we can infer you are talking about ACL and CCC then your example does not work as they are not independant of each other.

 

[Grendel]

Given that we can infer you are talking about ACL and CCC then your example does not work as they are not independant of each other.

Many posters such as James Smith and MMM disagree with you. I would think that sisu in the JR will be trying to prove they are not independent hence the decision to approve a commercially undesirable loan.

 

[hill83]

The old classic of attack the person rather than the content of the thread.
Whilst he's trying to make a point, it is a legitimate question.

And whilst he might be making his accountant up, having an accountant isn't outside the realms of possibiilty.

 

[patccfc]

I am interested in a hypothetical situation here. If you have a business and you have another business that we are told is totally independant from the first and they ask you to get a loan for them for £14 million over 40 years and you managed to source this at 4.8% per annum would you advise your client to do this business and charge the totally independant business 5.0% per annum? I today ran this by my accountant and he laughed his head off and said we all know the answer to that. Now I did post this earlier and it was removed as people thought it was inappropriate on a thread which was heaping praise on an accountant. I would really appreciate the accountants view on this. If it contradicts mine I may seek a new one.

Isn't ACL half owned by the council? If so, then it isn't a totally independent company, and hence they are protecting their own interests! In the same way UK bailed out Ireland when the brown stuff started to fly! So ultimately if you have absolutely no connection to another company you wouldn't, but the council does have a vested interest! Unless of course the council doesn't own part of ACL (in which case ignore this comment and apologies to all!) SISU OUT

 

[hill83]

Isn't ACL half owned by the council? If so, then it isn't a totally independent company, and hence they are protecting their own interests! In the same way UK bailed out Ireland when the brown stuff started to fly! So ultimately if you have absolutely no connection to another company you wouldn't, but the council does have a vested interest! Unless of course the council doesn't own part of ACL (in which case ignore this comment and apologies to all!) SISU OUT

And that's the exact reason the question was asked, and in my opinion, a reason we need to be worried about the judicial review. The companies are completely linked and that will be exactly the line Sisu will be taking in court.

 

[Sky Blue Pete]

To me if the interest rate was really only 0.2% difference (and that was only gleaned from the thread) then there is every reason to ask it. If the loan is over 40 years it means that the total repayment is £32 million at 5%. Is the council loan repayable over the same period or is that shorter? Would a company take such a long term liability when making such a tiny percentage profit per annum? In a real commercial environment is that a good arrangement?

CCc are not independent of acl though. They own half of it.

 

[Rusty Trombone]

The 0.2% is a guess at the moment though, so bear in mind before getting too carried away? Also the Council may have charged fees to ACL for arranging the loan in an attempt to back up any 'arms length' transactions.

Have the Council argued they are separate to ACL, or is it just posters on here?

 

[jas365]

Bloody hell Grendel have a day off will you?

Why are you asking that question on here if your accountant has already told you the answer?

 

[hill83]

CCc are not independent of acl though. They own half of it.

That's the point.

 

[Sky Blue Pete]

Given that we can infer you are talking about ACL and CCC then your example does not work as they are not independant of each other.

Isn't ACL half owned by the council? If so, then it isn't a totally independent company, and hence they are protecting their own interests! In the same way UK bailed out Ireland when the brown stuff started to fly! So ultimately if you have absolutely no connection to another company you wouldn't, but the council does have a vested interest! Unless of course the council doesn't own part of ACL (in which case ignore this comment and apologies to all!) SISU OUT

And that's the exact reason the question was asked, and in my opinion, a reason we need to be worried about the judicial review. The companies are completely linked and that will be exactly the line Sisu will be taking in court.

It's not illegal or poor business practice to have an interest in another conpany. CCc have not been secretive about their interest in acl so I cannot see a problem.

I don't know enough about state aid rules to know if they have a case to answer for that but someone makes the point about arvo and the sisu group and surely the hypocrisy will come out in due course

 

[bigfatronssba]

That's the point.

But that's not illegal, and if that's the strength of sisus argument the JR would be over in 5 mins.

 

[smouch1975]

Hey hey. Grendal is onto something here. We all know he upsets everybody every day. But. Don't lower it. He raises a point. I think it could be a little less cryptic. Let the man speak. He might learn from all your better behaviors