Let's call it, what it was...an investment to launch a new card, partnership and support platform.
I'm sure the "investment" was more than offset by the cardholder interest and transaction fees.
Had they not made the "investment" someone else would have and would be reaping the benefits.
Let's see the article about the Chase Manhattan or other bank executive that told Apple no.
Also bet Visa is not happy that MC has the deal.
Bottom line is we can’t trust any headline these days on any website. It’s all about spin and agendas. Online news sites aren’t news anymore, they are opinion sites. As someone has asked the question, “When did Journalism lose the capital “J” ? An investigation found that 73 recent articles on Cnet were written by AI. I wonder how many tech blogs are doing the same thing.
Let's call it, what it was...an investment to launch a new card, partnership and support platform.
I'm sure the "investment" was more than offset by the cardholder interest and transaction fees.
Had they not made the "investment" someone else would have and would be reaping the benefits.
Let's see the article about the Chase Manhattan or other bank executive that told Apple no.
Also bet Visa is not happy that MC has the deal.
This. Start up ventures take a while to break even and then a bit more to be profitable. This is a long term proposition. Losing money on initial investment is a given. Big nothing-burger here.
Frustrating to read in the headline and in the first and second paragraphs that the losses were mostly due to the apple card without a reason why. Department of Redundancy Department.
"Provision" is a term with special meaning in accounting. Basically, if you expect something to happen in future financial years you can formally recognise it in the current financial year; the aim is to document prudent management and alert (prospective) company owners to the potential for events that will meaningfully impact the financial state of the company in the medium term. If the expectation turns out to be incorrect, the provision can be unwound by another formal process. You can think of it as something like a lien, or a hedge: just in case this future event comes to pass, the company has allocated resources to deal with that eventuality.
However, as other commenters have pointed out, in large firms provisions can be utilised to reduce the tax burden in the current financial year for reasons that bear very little relation to prudent management.
"Provision" is a term with special meaning in accounting. Basically, if you expect something to happen in future financial years you can formally recognise it in the current financial year; the aim is to document prudent management and alert (prospective) company owners to the potential for events that will meaningfully impact the financial state of the company in the medium term. If the expectation turns out to be incorrect, the provision can be unwound by another formal process. You can think of it as something like a lien, or a hedge: just in case this future event comes to pass, the company has allocated resources to deal with that eventuality.
However, as other commenters have pointed out, in large firms provisions can be utilised to reduce the tax burden in the current financial year for reasons that bear very little relation to prudent management.
So, if GS stated a provision that they expected the Apple Card to generate 1.2 billion in revenue from interest, fees, etc., and that doesn’t happen they are allowed to write that off as a loss? Shouldn’t they pre-pay taxes on that provision in the year it is made as an offset?
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However, as other commenters have pointed out, in large firms provisions can be utilised to reduce the tax burden in the current financial year for reasons that bear very little relation to prudent management.