$TSLAQ Instead of having an accrual palooza, I will dribble these out as I have time and available information. The first account to be reviewed: Automotive Leasing Revenues. The remainder of the planet calls this Sales-Type Leasing (ASC 842.) (1/n)

GAAP allows revenue recognition if a manufacture or dealer leases the preponderance of useful life and economic value of inventory. Computer manufactures are significant users of this accounting treatment. The journal entries for this type of leasing are: (2/n)
The sales are the present value of the payments plus down payment. COGS is the cost of the equipment less the present value of the residual payment. (3/n)
The final receivable entry is the residual value added to the lease payment receivable to remove inventory from the financial statements. $TSLA classifies the lease receivable as an Operating Lease Vehicles, net on the balance sheet and they are subject to depreciation. (4/n)
The assumptions in the calculation that can be subject to manipulation: the implicit interest rate of the lease and the residual payments. Lower rates increase capitalization of the lease which gives higher revenues. Larger residual decreases cost of goods sold. (5/n)
I have done this calculation every quarter since 12/31/19 and posted on twitter. To simplify the understanding of the problem, I calculated the implicit rate of the leases. (6/n)
The down payments do not have a time value of money issue (I.E. – there is no time.) The future payments are TVM. Remember the revenue calculation? Present value of the lease payments plus down payment. (7/n)
Look at Q1 & Q2 2020. We can debate if a lease implicit rate of 1.29%, 1.93% or 3.20% are realistic (Q4 19, Q3 20 & Q4 20). But negative rates in Q1 & Q2? (8/n)
If you want a common sense validation, look at the number of units leased for those two quarters (6,104 & 4,806) compared to revenues (239m & 268m.) Yep, revenues increased in a period where the units leased fell. (9/n)
Which brings the most important point: someone went to the principles’ office in Q3. Equally important, I have no idea who the principle might be (SEC, Board or External Audit). (10/n)

More from Trading

TradingView isn't just charts

It's much more powerful than you think

9 things TradingView can do, you'll wish you knew yesterday: 🧵

Collaborated with @niki_poojary

1/ Free Multi Timeframe Analysis

Step 1. Download Vivaldi Browser

Step 2. Login to trading view

Step 3. Open bank nifty chart in 4 separate windows

Step 4. Click on the first tab and shift + click by mouse on the last tab.

Step 5. Select "Tile all 4 tabs"


What happens is you get 4 charts joint on one screen.

Refer to the attached picture.

The best part about this is this is absolutely free to do.

Also, do note:

I do not have the paid version of trading view.


2/ Free Multiple Watchlists

Go through this informative thread where @sarosijghosh teaches you how to create multiple free watchlists in the free


3/ Free Segregation into different headers/sectors

You can create multiple sections sector-wise for free.

1. Long tap on any index/stock and click on "Add section above."
2. Secgregate the stocks/indices based on where they belong.

Kinda like how I did in the picture below.

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