Alexander’s haul from looting Susa, the capital of Persia. Revised estimate of value of one Athenian Talent

Greek silver tetradrachm from Alexander the Great showing Hercules wearing lion skin at obverse and Zeus at reverse, dated 323-315 BC. Image courtesy Adobe Stock.
Greek silver tetradrachm from Alexander the Great’s timeframe, showing Hercules wearing lion skin at obverse and Zeus at reverse, dated 323-315 BC.  A tetradrachm is equal to four drachma. Image courtesy Adobe Stock.

Update:  I have revised my calculations here. Adjusted the value of an Athenian talent from 10 years salary today up to 400 years salary due to the dramatic improvement in our wealth and standard of living in the last 200 years (the Great Betterment). Also adjusted from estimated average wage in the U.S. of $20 an hour to average wage for skilled construction worker of $70,000 per year. That takes the rough valuation from $20 billion to $1,400 billion, or $1.4 trillion. That actually seems to make sense in a very rough way.

Continuing my discussion of a few tidbits of financial information from Alexander the Great’s military campaigns.

When Alexander approached Susa, the capital of Persia, news of his non-stop victories preceded him. Previous cities he captured surrendered before he arrived. That typically spared most citizens their lives and prevented the torching of the city.

Thus, Susa was handed to him without a fuss, except for a huge amount that Darius III carted off well in advance of Alexander’s arrival.

The author looks at the various reports of how much loot was acquired. Integrating the report that is likely to be most reliable with the other reports results in an estimate Alexander capturing a haul of 40,000 talents of uncoined bullion and about 10,000 talents of gold coin. The gold is roughly valued by expressing the amount what it would be in silver value.

Apparently the Persians didn’t cast most of their precious metals into coins, instead preferring to mint what they needed as they needed it.

Revised value of a talent

Multiple changes have shifted the relative value of gold and silver in relation to each other and in relation to their purchasing power. Instead of converting a talent of silver into ounces and converting that to current dollars at current exchange rates, I’ll start looking at piles of money in terms of average days wages.

Warning: I plan to update my valuation of a Talent based on the radical improvement in living standards that has developed since the Industrial Revolution.

Alexander’s haul from looting Susa, the capital of Persia. Revised estimate of value of one Athenian Talent Read More »

Value of 1 ancient Greek drachma and 1 Athenian Talent

Image: Flickr by Carole Raddato
Image: Flickr by Carole Raddato

Image: Courtesy of Flickr by Carole Raddato

If you are curious and want to follow along, I’ll be spending a bit of time looking at some details of ancient finance.

If you are already somewhat familiar, feel free to either roll your eyes as I flounder along or chuckle on how slow I am to catch on. If your knowledge of ancient finances is comparable to mine, that is to say approximately zero, please feel free to join me on a journey to learn a few details.

Wikipedia has some information about the Greek drachma which seems plausible. Will also mention some comment by Prof. Holt.

Comparable value

Article in Wikipedia says some economists and historians say one drachma in the 5th century (let me do a mental calculation – – that would be from about 499BC to 401BC) was about US$25 in 1990 or US$46.50 in 2015.

Classical historians give a different read for the 5th and 4th centuries (okay, mental math time, so that would be from around 499BC to 301BC, the 400s and 300s). In that time, one drachma would be around one days wages for a skilled worker or a hoplite. So that would not be minimum wage, but more along the line of a carpenter or mason.

Value of 1 ancient Greek drachma and 1 Athenian Talent Read More »

One framework for the ideal CPA trade association – Implications for the proposed AICPA-CIMA merger

 Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Professors Paul Miller and Paul Bahnson writing at Accounting Today describe their ideal professional association – and why the AICPA doesn’t measure up.

Use their framework to assess the proposed merger of the AICPA and CIMA.

My previous comments on the merger:  On that merger of the AICPA and the CIMA resulting in a new AICPA.

The professors suggest the following premises for what a trade association would look like if the goal was to advance the profession and the interest of its members. I will quote their comments:

One framework for the ideal CPA trade association – Implications for the proposed AICPA-CIMA merger Read More »

Update on Panama Papers – 5/9

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

The story is getting more confusing:

  • new revelation of an old technique to launder money,
  • US government actions to reduce laundering that look to me like they are just eyewash, and
  • small investors in a local real estate project appear to be investors working through the Panamanian system.

5/5 – Star-Telegram – Panama law firm used charities’ names as cloaks for clients – One of the schemes used in hiding money through offshore companies is setting up a foundation under Panamanian law. A private foundation can be set up which requires three directors, two of which must be publicly disclosed. Intended beneficiaries must be identified but could be changed before any funds disbursed.

The way this works is the two named individuals work for the law firm while the third undisclosed person is the person hiding money. The undisclosed person calls the shots with the two staff people from the law firm following instructions. The beneficiaries can be changed at any time.

Update on Panama Papers – 5/9 Read More »

Proposal to review House of Lannister financial statements

Going Concern has publicized the recently released financial statements for HBO’s Game of Thrones:  House Lannister’s Balance Sheet (Unaudited) Isn’t Looking So Hot.

The balance sheet was published by FloQast – Game of Thrones: The House of Lannister’s Financial Statements

You can find the balance sheet and notes here: Season 4 financial statements –

Leaked documents

In the interest of further extending the discussion of the financials, I am publishing below an internal e-mail sent to me anonymously by a senior manager in an eighth tier accounting firm here in the U.S. His (or her) firm is considering submitting a proposal for a review.

The memo, with names redacted:

Proposal to review House of Lannister financial statements Read More »

Ancient finances, Alexander the Great chapter

Image: Flickr by Carole Raddato
Image: Flickr by Carole Raddato

Image: Flickr by Carole Raddato

The Wall Street Journal has a delightful review by James Romm:  Conqueror and Squanderer. The review is of The Treasures of Alexander the Great: How One Man’s Wealth Shaped the World by Frank Holt.

I have a growing interest in ancient finances. Try thinking about how to run a large operation, such as an empire or an army on campaign when there is no banking system and no means of storing wealth other than controlling territory or possessing gold or silver. There is no way to gain any sort of liquidity. Your ability to buy something is limited to the gold in your hand.

How you pay your army today here in the field or buy supplies for 20,000 troops when your wealth is in the form of tons of gold which is a two-month march behind you?

Ancient finances, Alexander the Great chapter Read More »

Update on Panama Papers: searchable data base, no more bearer stocks, reasons to park money offshore

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Panama will be shutting down the bearer share concept for documenting ownership of a company. ICIJ plans to release a huge database on shell companies. Also some reasons I would have an offshore company or maybe five if I was a billionaire or high official in a corrupt country.

If I was super rich, I’d park some money offshore

4/19 – Daily Beast – Obama in Saudi Arabia: What Do These Oil Sheiks Have to Hide? – Short answer: their contingency escape plans.

Article wonders why the rulers in an absolute monarchy would want to park money in anonymous offshore accounts. Article suggests there isn’t any need to do so since absolute rulers not only own the country but decide by themselves what is legal and illegal.

The reason can be found by looking around after the Arab Spring. It seems like in just a flash the governments of Tunisia, Libya, and Egypt collapsed. Even the current prime minister of Pakistan was ousted (he has since regained power) and had to flee for his life.

The longer answer for hiding money in offshore accounts is it that when things can change overnight, you need to have someplace to run and some money to work with. An escape plan.

And then there are the super rich people who made their money legitimately.

Update on Panama Papers: searchable data base, no more bearer stocks, reasons to park money offshore Read More »

Reporters will not be sharing Panama Paper files with criminal investigators. Reporters are thinking they are journalists, not law enforcement staff.

Image courtesy DollarPhotoClub.com
Image courtesy DollarPhotoClub.com

A variety of governments want to get a complete set of the original files from the Panama Papers leak. The reporters are saying “no.”

4/19 – The Guardian – Panama Papers: US launches criminal inquiry into tax avoidance claims – First, a tip to the scare-mongering headline writer, editor, and reporter:

  • tax avoidance is not illegal.

Where there is tax evasion, I say throw ‘em in the clink.

On the other hand, as much as the reporter and editor may believe every penny of profit belongs to the government, it is not illegal to comply with the provisions of the tax law.

Other than announcing an investigation has begun, the article gives no more detail.

In particular, there is no indication of how DoJ plans to avoid tainting the investigation by viewing documents it knows are covered by attorney-client privilege. Based on my businessman’s limited knowledge of the law, I think the implications of knowingly viewing documents protected by attorney-client privilege would permanently taint any prosecution brought after reading those documents. That means any case that can be linked to tainted documents would get dismissed.

4/20 – Bloomberg – Panama Leak Spur New York Regulator to Seek Records From Banks – The Department of Financial Services jumps into the fray.

Reporters will not be sharing Panama Paper files with criminal investigators. Reporters are thinking they are journalists, not law enforcement staff. Read More »

The most interesting information from the Panama Papers is what *isn’t* in the files.

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

The best stories to be told as a result of the massive data leak cannot yet be written.

Why?

The really smart people use multiple layers of shell companies to hide assets.  When laundering money, one should move assets through a series of companies, with each subsequent jump being anonymous.

A long time ago I attended a continuing education class helping CPAs understand fraud. Why are such classes required? So that, hopefully, maybe, CPAs will be able to recognize fraud when it stares them in the face during the course of an audit.

During the class, the instructor went off script and explained to us how to launder money.

The most interesting information from the Panama Papers is what *isn’t* in the files. Read More »

Ballots are out for the proposed AICPA merger with CIMA

Got an email last evening which contained a link to the on-line ballot for the vote.

The AICPA has proposed combining their operations with the Chartered Institute of Management Accountants (CIMA). The new entity will be the Association of International Certified Professional Accountants. Yes, to confuse the market place there will be another AICPA.

I previously pondered On that merger of the AICPA and the CIMA resulting in a new AICPA.

Well, the ballots are out. I am guessing yours has arrived.

Voting took me just a moment to complete.

Please vote.

Ballots are out for the proposed AICPA merger with CIMA Read More »

Update on Panama Papers – 4/19

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Hasn’t been a lot of breaking news on the Panama Papers lately. Fair amount of follow-up though.

Here are a few articles of interest to me.

  • General update. How massive stories might be staffed in future.
  • More comments on the legitimate of offshore banking.
  • Senior government officials under the spotlight.

General update

4/9 – Fabius Maximus –Those Who Are (and Are Not) Sheltered From the Panama Papers – News we’ve heard thus far is likely just the tip of the iceberg of what will ultimately come out of the massive leak. Article pointed me to the following:

4/8 – Stratfor – Those Who Are (and Are Not) Sheltered From the Panama Papers Most of the damaging information released to date hits the developing world the most. Yet the bigger impact in on the western countries where there is relatively little information.

Article starts with point that the news we’ve read so far is just the start. Also points out the big leaks are growing in frequency and volume over the last several years.

Very long article walks through on a country-by-country basis what has been revealed and how big an issue is present. A few things of interest to me:

Senior politicians are implicated in five of the former Soviet republics.

A number of current or former Politburo members in China have family members involved.

Article dives deep into the possible implications or lack thereof in each of many countries.

4/14 – New Yorker – The Panama Papers and the Monster Stories of the Future – The person leaking the story gave the material to a German newspaper, who did not have the staffing to handle the story.

Update on Panama Papers – 4/19 Read More »

On that merger of the AICPA and the CIMA resulting in a new AICPA.

The AICPA is proposing a merger with the Chartered Institute of Management Accountants (CIMA) with the merged entity being called the AICPA.

Yes, that’s right. The new organization will be the Association of International Certified Professional Accountants.

Fifteen years ago we had the “cognitor” mess. That faded.

Now we have the CGMA credential which initially was available to anyone with a CPA certificate that wanted to write a check. Now it is open to anyone that wants to take a rigorous test, with no CPA credential needed. Apparently that hasn’t gone over very well, according to an article I will mention shortly.

So now we have a proposed merger of the AICPA (with CPA) with the CIMA to create the AICPA (with professional accountants in title).

An article at Going Concern is the starting point for my discussion today: Don’t Forget: Voting on the AICPA-CIMA Merger Starts on Monday.

Caleb Newquist doesn’t see much purpose here other than a power play by the AICPA (with CPA in title) leadership to increase their power by bringing in a lot of new members. He also sees AICPA (without CPA in title) as a dilution of the CPA brand.

That is my biggest concern. In addition to removing certified public accountant from the title of our new trade association there is a serious risk this would reduce the focus on the CPA world which would further reduce the brand.

Tom Hood, CEO of the Maryland Association of CPAs, speaks in favor of the proposal in a comment at the Going Concern article.

Background

If you want background from the AICPA, you can find it at the accounting horizons website.

In case you are wondering about the use of the word merger, looks to me like that is the appropriate description. Consider the second bullet point on the highlight page: …

On that merger of the AICPA and the CIMA resulting in a new AICPA. Read More »

More updates on Panama Papers leak. 4/14

Image courtesy DollarPhotoClub.com
Image courtesy DollarPhotoClub.com

Here are a few articles I found of interest in the last few days on offshore banking as revealed by the Panama Papers leak.

4/7 (from 4/9 print edition) – The Economist – A torrential leak – Not much news to me or to you if you’ve been reading my posts this week. This would be a great introduction if you have just tuned in.

A couple of tidbits. The law firm involved worked with around 14,000 law firms, incorporation companies, and banks, according to an estimate by ICIJ. Somewhere around 500 banks were involved in setting up companies. HSBC reportedly set up around 2,000 shell companies.

4/6 – Politico – Panama Papers pose ethics issues for U.S. prosecutors – Apparently there is a massive roadblock for the DoJ using all the materials in the data dump. Prosecutors are not allowed to even look at material that they think might be covered by attorney-client privilege. That makes it an issue to look at anything that came out of a law firm. Many documents are under attorney-client protection and almost all documents might be so covered.

4/6 – The Australian – Panama Papers: scary revelations for HSBC – …

More updates on Panama Papers leak. 4/14 Read More »

There are more issues revealed by the Panama Papers leaks than just tax evasion. Some contrarian opinions on how to look at offshore banking.

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

The primary focus in media coverage is on tax evasion. There are other ways to look at the offshore industry. There are more and deeper legal issues involved. The tax evasion concerns under discussion are just the starting point on the list of issues that ought to generate irritation.

Following articles provide a variety of alternative views of what is going on in the Panama Papers leaks. That the articles I mention contradict each other illustrates my point that there are more issues involved than just tax evasion.

4/7 – Jason Zweig at Wall Street Journal – Panama Papers: A History of Tax Evasion from Ancient Rome to the French Revolution to 19th-Century New Jersey

Question for you to ponder: Why have people been hiding their money for over 2,000 years?

In 1934 when Switzerland made it a crime for a banker to reveal a customer’s name, they were a bit behind the curve. Liechtenstein, Luxembourg, and Bermuda were tax havens a couple of decades earlier. As a depressing note, the Swiss offered confidentiality for a fee all the way back in 1789.

There are more issues revealed by the Panama Papers leaks than just tax evasion. Some contrarian opinions on how to look at offshore banking. Read More »

First class mail rates to drop April 10, 2016

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Price for first class mail will drop from $0.49 to $0.47 on 4/10/16. Price for an additional ounces will drop from $0.22 to $0.21.

If you are a large enough organization to have a shipping department or a staff person who keeps up on all the minutia of shipping, then you already knew about this change. If you are a small organization like me, you may not have noticed. Since I just caught wind of it yesterday, I’m sure there are lots of other people who don’t know about it yet.

(Cross-post from my other blog, Nonprofit Update, because I’m guessing lots of other small CPA firms haven’t noticed the change.)

A surcharge was put in place two years ago, in January 2014, equal to the reductions mentioned above. The surcharge was designed to catch up for the revenue drop during the great recession. The regulator for postal prices (Postal Regulatory Commission) ordered the surcharge added in 2014 and ordered it to be dropped this month.

After a search, I could not find the new price list at the USPS website, so I’m left with a guess that the flat envelope rates will change by the same amounts.

Additional info:

First class mail rates to drop April 10, 2016 Read More »