We just saw how to calculate the depreciation using straight line method, now we are going to calculate depreciation using another method, i.e. Decline Balance method. This is also known as double declining balance method. Here are are again going to use progress bar in the list control.

Here is a code to calculate the depreciation using declining balance method.

  1: for (int iIndex = 0; iIndex < year; iIndex++)

  2: {

  3: 	depExpense = bookValue * percentage * 2;

  4:

  5: 	if (bookValue - depExpense < scrap)

  6: 	{

  7: 		depExpense = bookValue - scrap;

  8: 		bookValue = scrap;

  9: 	}

 10: 	else

 11: 	{

 12: 		bookValue -= depExpense;

 13: 	}

 14:

 15: 	accDepreciation += depExpense;

 16:

 17: 	DepreciationInfo dpInfo = new DepreciationInfo();

 18: 	dpInfo.Year = (iIndex + 1);

 19: 	dpInfo.Depreciation = depExpense;

 20: 	dpInfo.AccDepreciation = accDepreciation;

 21: 	dpInfo.BookValue = bookValue;

 22: 	dpInfo.Percentage = (bookValue * 100) / cost; ;

 23:

 24: 	depreciation.Add(dpInfo);

 25: }

 26: 

Here is a complete XAML code of the project.

  1: <Window x:Class="Depreciation.Window1"

  2:     xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"

  3:     xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"

  4:     Title="Depreciation" Height="400" Width="600">

  5:

  6:     <Grid Background="AliceBlue">

  7:         <Grid.RowDefinitions>

  8:             <RowDefinition/>

  9:             <RowDefinition/>

 10:             <RowDefinition/>

 11:             <RowDefinition Height="4*"/>

 12:             <RowDefinition/>

 13:         </Grid.RowDefinitions>

 14:

 15:         <Grid.ColumnDefinitions>

 16:             <ColumnDefinition/>

 17:             <ColumnDefinition/>

 18:         </Grid.ColumnDefinitions>

 19:         <TextBlock Grid.Column="0" Grid.Row="0" Margin="5" VerticalAlignment="Center">Enter Cost of Fixed Asset</TextBlock>

 20:         <TextBox Grid.Column="1" Grid.Row="0" Margin="5" VerticalAlignment="Center" Name="txtCost"></TextBox>

 21:         <TextBlock Grid.Column="0" Grid.Row="1" Margin="5" VerticalAlignment="Center">Enter life Span</TextBlock>

 22:         <TextBox Grid.Column="1" Grid.Row="1" Margin="5" VerticalAlignment="Center" Name="txtYear"></TextBox>

 23:         <TextBlock Grid.Column="0" Grid.Row="2" Margin="5" VerticalAlignment="Center">Enter Scrap Value</TextBlock>

 24:         <TextBox Grid.Column="1" Grid.Row="2" Margin="5" VerticalAlignment="Center" Name="txtScrapValue"></TextBox>

 25:

 26:         <ListView Grid.Column="0" Grid.Row="3" Grid.ColumnSpan="2" Name="list" Margin="5" HorizontalContentAlignment="Stretch">

 27:             <ListView.View>

 28:                 <GridView>

 29:                     <GridView.ColumnHeaderTemplate>

 30:                         <DataTemplate>

 31:                             <Border BorderBrush="Brown" BorderThickness="2" CornerRadius="5">

 32:                                 <Border.Background>

 33:                                     <LinearGradientBrush>

 34:                                         <GradientStop Offset="0" Color="Wheat"/>

 35:                                         <GradientStop Offset="1" Color="LightCoral"/>

 36:                                     </LinearGradientBrush>

 37:                                 </Border.Background>

 38:                                 <TextBlock Foreground="Blue" FontSize="14" FontWeight="Bold" Margin="5" Text="{Binding}" Width="Auto"/>

 39:                             </Border>

 40:                         </DataTemplate>

 41:                     </GridView.ColumnHeaderTemplate>

 42:                     <GridViewColumn Width="Auto" Header="Year" DisplayMemberBinding="{Binding Path=Year}"/>

 43:                     <GridViewColumn Width="Auto" Header="Depreciation" DisplayMemberBinding="{Binding Path=Depreciation}"/>

 44:                     <GridViewColumn Width="Auto" Header="Accumulated Depreciation" DisplayMemberBinding="{Binding Path=AccDepreciation}"/>

 45:                     <GridViewColumn Width="Auto" Header="Book Value" DisplayMemberBinding="{Binding Path=BookValue}"/>

 46:                     <GridViewColumn Width="Auto" Header="Percentage">

 47:                         <GridViewColumn.CellTemplate>

 48:                             <DataTemplate>

 49:                                 <ProgressBar Width="50" Height="20" Margin="5" Minimum="0" Maximum="100" Value="{Binding Percentage}"/>

 50:                             </DataTemplate>

 51:                         </GridViewColumn.CellTemplate>

 52:                     </GridViewColumn>

 53:                 </GridView>

 54:             </ListView.View>

 55:         </ListView>

 56:         <Button Grid.Column="0" Grid.Row="4" Margin="10" Width="75" Name="btnCalculate" Click="btnCalculate_Click">Calculate</Button>

 57:         <Button Grid.Column="1" Grid.Row="4" Margin="10" Width="75" Name="btnExit" Click="btnExit_Click">Exit</Button>

 58:     </Grid>

 59: </Window>

 60: 

Here is complete C# code of the project.

  1: using System;

  2: using System.Collections.Generic;

  3: using System.Linq;

  4: using System.Text;

  5: using System.Windows;

  6: using System.Windows.Controls;

  7: using System.Windows.Data;

  8: using System.Windows.Documents;

  9: using System.Windows.Input;

 10: using System.Windows.Media;

 11: using System.Windows.Media.Imaging;

 12: using System.Windows.Navigation;

 13: using System.Windows.Shapes;

 14:

 15: namespace Depreciation

 16: {

 17:     /// <summary>

 18:     /// Interaction logic for Window1.xaml

 19:     /// </summary>

 20:     public partial class Window1 : Window

 21:     {

 22:         List<DepreciationInfo> depreciation;

 23:         private int year;

 24:         private double cost;

 25:         private double scrap;

 26:

 27:         public Window1()

 28:         {

 29:             InitializeComponent();

 30:

 31:             depreciation = new List<DepreciationInfo>();

 32:         }

 33:

 34:         private void btnExit_Click(object sender, RoutedEventArgs e)

 35:         {

 36:             Close();

 37:         }

 38:

 39:         private void btnCalculate_Click(object sender, RoutedEventArgs e)

 40:         {

 41:             depreciation.Clear();

 42:

 43:             year = Convert.ToInt32(txtYear.Text);

 44:             cost = Convert.ToDouble(txtCost.Text);

 45:             scrap = Convert.ToDouble(txtScrapValue.Text);

 46:

 47:             if (year <= 0)

 48:             {

 49:                 MessageBox.Show("Number of years can not be zero or negative.");

 50:                 return;

 51:             }

 52:

 53:             if (cost <= 0 || scrap <= 0)

 54:             {

 55:                 MessageBox.Show("Either Cost or Scrap value is not correct.");

 56:                 return;

 57:             }

 58:

 59:             double percentage = 100 / year;

 60:             percentage /= 100;

 61:             double accDepreciation = 0;

 62:             double bookValue = cost;

 63:             double depExpense = 0;

 64:

 65:             for (int iIndex = 0; iIndex < year; iIndex++)

 66:             {

 67:                 depExpense = bookValue * percentage * 2;

 68:

 69:                 if (bookValue - depExpense < scrap)

 70:                 {

 71:                     depExpense = bookValue - scrap;

 72:                     bookValue = scrap;

 73:                 }

 74:                 else

 75:                 {

 76:                     bookValue -= depExpense;

 77:                 }

 78:

 79:                 accDepreciation += depExpense;

 80:

 81:                 DepreciationInfo dpInfo = new DepreciationInfo();

 82:                 dpInfo.Year = (iIndex + 1);

 83:                 dpInfo.Depreciation = depExpense;

 84:                 dpInfo.AccDepreciation = accDepreciation;

 85:                 dpInfo.BookValue = bookValue;

 86:                 dpInfo.Percentage = (bookValue * 100) / cost; ;

 87:

 88:                 depreciation.Add(dpInfo);

 89:             }

 90:

 91:             list.ItemsSource = depreciation;

 92:         }

 93:     }

 94:

 95:     public class DepreciationInfo

 96:     {

 97:         public int Year

 98:         { get; set; }

 99:

100:         public double Depreciation

101:         { get; set; }

102:

103:         public double AccDepreciation

104:         { get; set; }

105:

106:         public double BookValue

107:         { get; set; }

108:

109:         public double Percentage

110:         { get; set; }

111:     }

112: }

113: 

Here is the output of the program.

We can easily insert progras bar inside the tree view just like we added check box and combo box. We are again going to use the CellTemplate property of GridViewColumn. We are going to define data template to use the progress bar.

This time we are going to do something useful rather than using some dummy sample. This time we are going to make one simple application to calculate the book value of a fixed assets cost using the straight line method.

Here is a class to store the information about the depreciation.

  1: public class DepreciationInfo

  2: {

  3: 	public int Year

  4: 	{ get; set; }

  5:

  6: 	public double Depreciation

  7: 	{ get; set; }

  8:

  9: 	public double AccDepreciation

 10: 	{ get; set; }

 11:

 12: 	public double BookValue

 13: 	{ get; set; }

 14:

 15: 	public double Percentage

 16: 	{ get; set; }

 17: }

 18: 

Calculation of book value using straight line method is very simple. Here is a simple method to calculate the book value.

  1: double depExpense = depValue / year;

  2: double accDepreciation = 0;

  3: double bookValue = cost;

  4:

  5: for (int iIndex = 0; iIndex < year; iIndex++)

  6: {

  7: 	accDepreciation += depExpense;

  8: 	bookValue -= depExpense;

  9: 	DepreciationInfo dpInfo = new DepreciationInfo();

 10: 	dpInfo.Year = (iIndex + 1);

 11: 	dpInfo.Depreciation = depExpense;

 12: 	dpInfo.AccDepreciation = accDepreciation;

 13: 	dpInfo.BookValue = bookValue;

 14: 	dpInfo.Percentage = bookValue * 100 / cost;

 15:

 16: 	depreciation.Add(dpInfo);

 17: }

 18:

 19: 

Here is a complete XAML code of this project.

  1: <Window x:Class="Depreciation.Window1"

  2:     xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"

  3:     xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"

  4:     Title="Depreciation" Height="400" Width="600">

  5:     <Grid Background="AliceBlue">

  6:         <Grid.RowDefinitions>

  7:             <RowDefinition/>

  8:             <RowDefinition/>

  9:             <RowDefinition/>

 10:             <RowDefinition Height="4*"/>

 11:             <RowDefinition/>

 12:         </Grid.RowDefinitions>

 13:

 14:         <Grid.ColumnDefinitions>

 15:             <ColumnDefinition/>

 16:             <ColumnDefinition/>

 17:         </Grid.ColumnDefinitions>

 18:         <TextBlock Grid.Column="0" Grid.Row="0" Margin="5" VerticalAlignment="Center">Enter Cost of Fixed Asset</TextBlock>

 19:         <TextBox Grid.Column="1" Grid.Row="0" Margin="5" VerticalAlignment="Center" Name="txtCost"></TextBox>

 20:         <TextBlock Grid.Column="0" Grid.Row="1" Margin="5" VerticalAlignment="Center">Enter life Span</TextBlock>

 21:         <TextBox Grid.Column="1" Grid.Row="1" Margin="5" VerticalAlignment="Center" Name="txtYear"></TextBox>

 22:         <TextBlock Grid.Column="0" Grid.Row="2" Margin="5" VerticalAlignment="Center">Enter Scrap Value</TextBlock>

 23:         <TextBox Grid.Column="1" Grid.Row="2" Margin="5" VerticalAlignment="Center" Name="txtScrapValue"></TextBox>

 24:

 25:         <ListView Grid.Column="0" Grid.Row="3" Grid.ColumnSpan="2" Name="list" Margin="5" HorizontalContentAlignment="Stretch">

 26:             <ListView.View>

 27:                 <GridView>

 28:                     <GridView.ColumnHeaderTemplate>

 29:                         <DataTemplate>

 30:                             <Border BorderBrush="Brown" BorderThickness="2" CornerRadius="5">

 31:                                 <Border.Background>

 32:                                     <LinearGradientBrush>

 33:                                         <GradientStop Offset="0" Color="Wheat"/>

 34:                                         <GradientStop Offset="1" Color="LightCoral"/>

 35:                                     </LinearGradientBrush>

 36:                                 </Border.Background>

 37:                                 <TextBlock Foreground="Blue" FontSize="14" FontWeight="Bold" Margin="5" Text="{Binding}" Width="Auto"/>

 38:                             </Border>

 39:                         </DataTemplate>

 40:                     </GridView.ColumnHeaderTemplate>

 41:                     <GridViewColumn Width="Auto" Header="Year" DisplayMemberBinding="{Binding Path=Year}"/>

 42:                     <GridViewColumn Width="Auto" Header="Depreciation" DisplayMemberBinding="{Binding Path=Depreciation}"/>

 43:                     <GridViewColumn Width="Auto" Header="Accumulated Depreciation" DisplayMemberBinding="{Binding Path=AccDepreciation}"/>

 44:                     <GridViewColumn Width="Auto" Header="Book Value" DisplayMemberBinding="{Binding Path=BookValue}"/>

 45:                     <GridViewColumn Width="Auto" Header="Percentage">

 46:                         <GridViewColumn.CellTemplate>

 47:                             <DataTemplate>

 48:                                 <ProgressBar Width="50" Height="20" Margin="5" Minimum="0" Maximum="100" Value="{Binding Percentage}"/>

 49:                             </DataTemplate>

 50:                         </GridViewColumn.CellTemplate>

 51:                     </GridViewColumn>

 52:                 </GridView>

 53:             </ListView.View>

 54:         </ListView>

 55:         <Button Grid.Column="0" Grid.Row="4" Margin="10" Width="75" Name="btnCalculate" Click="btnCalculate_Click">Calculate</Button>

 56:         <Button Grid.Column="1" Grid.Row="4" Margin="10" Width="75" Name="btnExit" Click="btnExit_Click">Exit</Button>

 57:     </Grid>

 58: </Window>

 59: 

Here is a complete C# code of this project.

  1: using System;

  2: using System.Collections.Generic;

  3: using System.Linq;

  4: using System.Text;

  5: using System.Windows;

  6: using System.Windows.Controls;

  7: using System.Windows.Data;

  8: using System.Windows.Documents;

  9: using System.Windows.Input;

 10: using System.Windows.Media;

 11: using System.Windows.Media.Imaging;

 12: using System.Windows.Navigation;

 13: using System.Windows.Shapes;

 14:

 15: namespace Depreciation

 16: {

 17:     /// <summary>

 18:     /// Interaction logic for Window1.xaml

 19:     /// </summary>

 20:     public partial class Window1 : Window

 21:     {

 22:         List<DepreciationInfo> depreciation;

 23:         private int year;

 24:         private double cost;

 25:         private double scrap;

 26:

 27:         public Window1()

 28:         {

 29:             InitializeComponent();

 30:

 31:             depreciation = new List<DepreciationInfo>();

 32:         }

 33:

 34:         private void btnExit_Click(object sender, RoutedEventArgs e)

 35:         {

 36:             Close();

 37:         }

 38:

 39:         private void btnCalculate_Click(object sender, RoutedEventArgs e)

 40:         {

 41:             depreciation.Clear();

 42:

 43:             year = Convert.ToInt32(txtYear.Text);

 44:             cost = Convert.ToDouble(txtCost.Text);

 45:             scrap = Convert.ToDouble(txtScrapValue.Text);

 46:

 47:             if (year <= 0)

 48:             {

 49:                 MessageBox.Show("Number of years can not be zero or negative.");

 50:                 return;

 51:             }

 52:

 53:             double depValue = cost - scrap;

 54:

 55:             if (depValue <= 0)

 56:             {

 57:                 MessageBox.Show("Either Cost or Scrap value is not correct.");

 58:                 return;

 59:             }

 60:

 61:             double depExpense = depValue / year;

 62:             double accDepreciation = 0;

 63:             double bookValue = cost;

 64:

 65:             for (int iIndex = 0; iIndex < year; iIndex++)

 66:             {

 67:                 accDepreciation += depExpense;

 68:                 bookValue -= depExpense;

 69:                 DepreciationInfo dpInfo = new DepreciationInfo();

 70:                 dpInfo.Year = (iIndex + 1);

 71:                 dpInfo.Depreciation = depExpense;

 72:                 dpInfo.AccDepreciation = accDepreciation;

 73:                 dpInfo.BookValue = bookValue;

 74:                 dpInfo.Percentage = bookValue * 100 / cost;

 75:

 76:                 depreciation.Add(dpInfo);

 77:             }

 78:

 79:             list.ItemsSource = depreciation;

 80:         }

 81:     }

 82:

 83:     public class DepreciationInfo

 84:     {

 85:         public int Year

 86:         { get; set; }

 87:

 88:         public double Depreciation

 89:         { get; set; }

 90:

 91:         public double AccDepreciation

 92:         { get; set; }

 93:

 94:         public double BookValue

 95:         { get; set; }

 96:

 97:         public double Percentage

 98:         { get; set; }

 99:     }

100: }

101: 

Here is the output of this program.

MANY READERS SOUGHT DETAILS REGARDING ROAD WIDENING PROCESS AND COMPENSATION

UNDER TDR(TRANSFERABLE DEVELOPMENT RIGHT) COMPENSATION IN ANY FORM AT ANY TIME WILL NOT BE PAID UNDER THE KTCP ACT.

IF THE PROPERTY OR LAND OR SITE ACQUIRED UNDER LAND ACQUISITION ACT, SUITABLE MONETARY COMPENSATION WILL BE PAID.

UNDER THE LAND ACQUISITION ACT, THE COMPENSATION WILL BE PAID AS PER THE GUIDANCE VALUE AND THE PRESENT DEPRECIATED VALUE OF THE BUILDING. THE COMPENSATION WILL BE PAID ONLY FOR THE STRUCTURES OR BUILDINGS, WHICH HAD BEEN CONSTRUCTED AS PER THE SANCTIONED BUILDING PLANS.

MOST OF THE BUILDINGS HAVE MORE THAN 50%DEVIATION AND VIOLATION.  SUCH BUILDINGS ARE NOT ELIGIBLE FOR BUILDING COMPENSATION TO THE EXTENT OF VIOLATION.  THE COMPENSATION IS PAYABLE ONLY FOR THE GROUND OR SITE AND THE SANCTIONED PORTIONS OR STRUCTURES.

Wednesday November 18, 2009 06:57:10 AM GMT

* Dollar recovers from 15-month low as mkt digests Bernanke

* Euro once again unable to hold above $1.50

* China’s Hu makes no mention of yuan after Obama meeting

(Recasts, updates prices, adds comment and quote)

By Jamie McGeever

LONDON, Nov 17 (Reuters) – The dollar rebounded on Tuesday from Monday’s 15-month lows after Federal Reserve Chairman Ben Bernanke made rare comments about the dollar, encouraging traders to trim longer-term bets against the currency.

Bernanke surprised investors on Monday when he said the central bank was “attentive to implications of changes in the value of the dollar”, although he reiterated that interest rates would remain exceptionally low for an “extended period”.

Some interpreted his remarks on the dollar, which is usually the purview of Treasury, as a sign the Fed is worried further depreciation could stoke inflation.

The euro briefly popped above $1.50 but was once again unable to hold above that level, where large options-related activity is also providing tough resistance, traders said.

European Central Bank President Jean-Claude Trichet also spoke on currencies on Tuesday, reiterating his oft-repeated views that a strong dollar is in the U.S. interest and that the euro was never intended to be a reserve currency..

“He (Bernanke) was tying to emphasise to the market what Fed thinking is going into the last few months of the asset purchase scheme. They have to talk well ahead to give no shocks to the market, and that’s what Bernanke was trying to do,” said Peter Frank, senior currency strategist at Societe Generale in London.

Frank said the dollar remained in a longer-term downtrend but said Bernanke’s remarks were probably aimed more at “smoothing” its decline than reversing it, and that traders are “a little uncomfortable” being long of euros above $1.50.

At 1035 GMT the dollar index was up a third of a percent on the day at 75.17, after striking a 15-month low of 74.679 on Monday.

The euro fell 0.4 percent to $1.4910, off more than a cent from above $1.5015 struck on Monday, weighed down early on by profit booking and options-related selling around $1.50.

It was in the middle of the $1.48-$1.51 range which traders say marks a large “double-no-touch” options structure that rolls off on Friday.

The dollar was unchanged against the yen at 89.05 yen, recovering from 88.74 yen earlier in the day, its lowest in just over a month.

FED RHETORIC

The dollar rose more sharply against so-called “commodity currencies” like the Australian and Canadian dollars, gaining 1 percent against both as oil, metals, and equity prices fell across the board.

Bernanke’s comments on Monday came as U.S. President Barack Obama was in China, although few expect the visit to result in any near-term changes in Beijing’s foreign exchange policy.

Chinese President Hu Jintao made no mention of the yuan after meeting Obama, and the U.S. leader only said he was pleased with China’s commitment on moving towards more market-oriented exchange rates.

Richard Fisher, president of the Dallas Fed, also said on Monday the dollar’s decline so far has not been disorderly although the commitment to keep rates low for an extended period could create the potential for carry trades.

And Fed Vice Chairman Donald Kohn said the low interest rate policy was meant to encourage investors to move into riskier assets and that there are no signs yet of an asset bubble building up in the United States.

“It’s very unusual for the Fed to even comment on the dollar, so in that respect the market was caught by surprise,” said Johan Javeus, strategist at SEB in Stockholm.

But for the dollar to reverse its long-term downtrend, China needed to take greater steps toward a more flexible currency regime, or the Fed had to signal rate hikes are imminent.

“Neither of those prerequisites have been fulfilled, so the controlled, grinding lower of the dollar will continue,” Javeus said.

Sterling was well supported after UK inflation figures came in above forecasts, and on an Italian press report that Italian chocolate maker Ferrero might be considering an offer with friendly investors for an alliance with Britain’s Cadbury.

The euro was last down 0.3 percent on the day at 88.65 pence

Today during prayer, our spiritual formation director asked which of us needed prayer for a lack of confidence. This question resonated deep in my heart; , oh how many times I’ve told myself I wasn’t able to do the thing I wanted, or be used in the way I wanted to be used, only because I felt as if I weren’t good enough, or talented enough, or “anointed” enough! This is something I truly need to overcome, because it isn’t in my own strength that I’ll find usefulness, but in His alone.

This issue came to ahead the night I helped Clayton, my worship pastor, lead worship at the Wednesday night Adult Service. As we sound checked and went over songs with the rest of the band, all of my inadequacies were brought front and center. I was humbled, to say the least, and realized how little I know about how to lead worship. This threw me into a whirlwind of self-doubt, self-depreciation, self-loathing, self-pity, and all the other “self” things you can think of.

After the set, I walked off stage, under the orange and purple stage lights, and sauntered off to the green room, where I collected my things. I packed my guitar up and then made my way covertly up the side hallway that led into the church concourse. It was nighttime, and the huge space was completely unoccupied by anyone but me.

Scattered every 15 or so feet throughout the concourse, which curved its way along the front of the building, are comfortable chairs and tables. I sat down in one of the more comfortable ones and just began to think to myself. The word of the night was “defeated,” I just felt completely and utterly defeated. It was at this moment that other questions began flooding my mind, things like “what are you doing here?” and “you know aren’t ever going to learn the things you need.” And the solutions to these problems were certainly no better; “just pack up and leave,” “tell Clayton you want to switch internships.” These thoughts were not from the Lord, and I realized, sitting in the church alone except for my negative thoughts, that I needed to remove myself from the situation, with the goal of easing my mind and putting those thoughts to rest.

To stray from the topic a bit, I have resolved to remove myself from situations and circumstances where I feel as though I’m “wallowing” in my insecurities and sadness. Do you relate to that? I think sometimes we get so used to these negative, self-defeating thoughts that it becomes uncomfortable to be anywhere other than wherever those thoughts are allowed to roam unhindered through the corridors of our broken minds.

In other words, I think we enjoy these thoughts sometimes.

The goal is to enjoy the positives more, to flee from the negatives. And so, I have decided to be more aware of these moments where I rest and find comfort in such negative and self-depreciating thoughts, and then remove myself from the situation.

Anyway, after realizing this self-defeating mindset I found myself in, I pulled out my journal and made a quick note of what was happening in my heart. I then called a friend and asked him to come and pick me up instead of waiting for service to be over and getting a ride back with someone else. He came, picked me up, and we had a great conversation about what I was dealing with, the questions, the lack of confidence, the humility I was experiencing. And it was during this conversation that the Lord truly did a miraculous thing in my mind and in my heart, and I realized how silly the whole thing was. I literally went from wanting to leave the program and being totally insecure to having the wonderful understanding that it is OK to still be in learning! We don’t have to be perfect, and I will get to a point one of these days where I am comfortable in my calling and able to do all the things that worship leaders do, musically and spiritually. Once I realized this, I was just fine.

I think this realization, that I have a real issue of lacking confidence, has spurred me on to work at the skills and heart issues I came to this program to deal with. If you are discouraged because you aren’t “where you wish you were” in your calling or in your heart, I say you should calm your soul! Find peace in the fact that none of us are truly there yet and that we are all just learning and growing and, as we like to say in OSL, “in process.” Be matter-of-fact with who you are, what you have, and where you are going. Do not think less or more of yourself than you ought, and be OK with having to learn and grow. There is so much freedom in it!

Kids now a days have more access to many things, and by access I mean on the computer, which is leading to a decrease in the ability of coherent speaking of the english language. These are not only access to things such as chat rooms, porn, games, and blogs (albeit there is more out there, but this sums up the jist of what I and many other kids out there do on a lazy day basis). I don’t mean to make it sound that every kid watches porn, plays games or chats, I’m just saying these are the many, too easily accessible things that are diminishing our human contact, leading to a depreciation of the english language. I have noticed just within a span of a few years, from my brother’s grade, only two years older than me, to my generation, to two or three years under me. Kids have begun to shift and speak a completely different language. For example, I was at a friend’s work christmas party, and there was this kid who was 16, and in the conversation he said “want beef?” This isn’t really an example of a depreciation of the language; it’s actually quite clever, taken from the Pigin language for “got a problem/want to fight?” But it’s things like this that make the language shift. I’ll come back to this “shift.” Other times I hear kids using words they learned on the computer, such as “leet” which in computer language is 1337, meaning elite. Other variations of computer language used in daily life are LOL, 143. These mean laughing out loud and I love you, these examples come from the 1337 or leet computer language. This leet language, for a bit of background, was formed in the ‘underground’ of the online computer gaming world. Codes were formed, using alpha-numerical and other characters to form sentences, which contain all sorts of spelling and grammatical errors; it nonetheless formed itself into a language. Besides computers and they’re easily and readily available ways to access things instantaneously across the globe, are its ways to exploit yourself just as instantly across the globe. I’m not saying this in a bad way, it’s just an integral part of the shift in language. With these online blog and chat features and programs such as MySpace, Facebook, and Nexopia, to name a few popular ones, kids are able to open the door into their own personal life, space, and home. They’re able to show friends, family, music, habits, hobbies, photos (sometimes quite promiscuous) to everyone and anyone willing to be their “friend” over the net. This then leads to other kids (sometimes not kids at all, “Someone who may claim to be a 14 year old girl, may in fact be a 40 year old man” quoted from the Nexopia website) posting pictures and messages of random things. This also ties in with fashion, music, and current trends (all tie in with emo, punk, surfer, skater, and retro, most of the trends of today) of which I’ll be very succinct when I say it reflects some european ways. There’s also the more accepting attitude toward homosexuality (personally I don’t care who is and isn’t gay). This leads people (straight or otherwise) to be more free of what they say. Men and women using more words such as cute, and “I love you” even to mean just a friendship. However it also leads to weirdly written sentences (sometimes not even sentences at all) with strangely inserted characters in the middle of it to form some type word or phrase that sometimes makes no sense to me, but lots of sense to the receiver. To be sure that it wasn’t an inside joke with a couple or few people who were friends, I’ve spent many an hours looking at nexopia, myspace and other pages of random people who all have similar writings. Examples that stuck out the most are ‘&&,’ the use of the ampersand twice. Also the use of && along with ‘amp;it,’ no spelling mistake there, the semi colon was put there by the people typing it. Supposedly this means the next word is continued from the last word or sentence into the next. There’s also the use of emoticons. However some people, instead of using the actual face, or making a look-alike face , they do :rollseyes:, which usually in HTML format, forms a small face rolling its eyes, but they do it to signify the face. These types of things all shift language to becoming lazier. Instead of saying how it made you feel, kids just put “I went to Mike’s party and it was :thumbsdown:” This is a simple, stupid example I made up while writing this, but it gets the point across. Instead of saying “I went to MIke’s party, it was pretty boring, no one showed up, so I left early,” they just put the thumbsdown sign in hopes that the other person they are talking to will understand. Many times I have seen someone say, instead of “I love you” or even 143, the code language, they write I <3 you, which is nice, and means "I heart you," (the <3 is supposed to be a heart). Then that slowly shifted to "I hearts you" instead of people putting "I love you lots," or in the worst case "I <3 x2 you" (meaning I heart you times two), we get a mutation into something like "I hearted you much." The language just gets very strange. These examples show up in daily speech, I've heard some of the people I know that are between the ages of 14-20 speaking like this (not to say there's not older people talking and writing like this, it's just these people are what I've experienced and how I gained this 'knowledge'). My knowledge is based predominantly on just plain spending time on the computer, using my own accounts of facebook, nexopia, myspace, hi5, friendster, tagworld, all those similar things, and not to forget MSN and online computer games. The knowledge of these things just seeped into my conscious and I began to think about it, along with doing my own research from sites such as wikipedia, urbandictionary.com (that may sound like an uncredible source to do research from, but alot of the facts and postings on there are true, you just have to look through the pile of funny dirt thats on top). I say knowledge meaning just things I think about and the ideas and theories I form in my mind, along with putting it together like a puzzle with the informal research I've done, and just by talking to others on the subject. One person I talked to said that the english language will be completely screwed up and changed in the next years to come. As I thought about that, it made some sense in my mind. I see things just from the change from about 5 years ago, the language is completely different. Maybe it will be screwed up and maybe it won't. Who knows.

If we look at the times through the ages, there was different speaking, almost every 10-20 years. Lets start with the 1930's-1950's, it seems that people who endured the depression and war were the fathers (figuratively) of a more mature language. But they were also the fathers (literally) of a completely different language ten years later: their kids. These kids who were born between 1940-1950's, grew up in the 1960's, in their teen years, and looking at the language differences and uses from the 50's to the 60's, only ten years, there was a big leap. People seemed to speak more conservatively and formal in the 50's. In the span to the 60's, something evolved to the hippie language. It was a neat and wondrous language that probably many thought was very strange and made no sense. Going on to the 1970's, it seems the language evolved to the, what we refer to today as, as the retro language, or disco era language. That was also a cool strange way of speaking. That then evolved in the 1980's with the punk and grunge revolution and into the 1990's where it was a homogenized and coagulated form of what seems like 60's, 70's, 80's, all vying for a place. The 2000's are now evolving into something mixed up with all the past years languages. I've heard things dating back hundreds of years, even thousands; some things of ye olde english, some things of the retro/disco eras. This all evolves together and mutates into something weird, and it shifts the language.

(CFD.net.au – Contract for Difference, Share, Forex, ETFs, Commodities Traders) – Pleschinger , an analyst at Morgan Stanley, said separately in a telephone interview from London. The rand lost 0.5 percent to 7.3723 per dollar by 5:50 p.m. in Johannesburg, from a close of 7.3325 yesterday. “The strength of the currency means South Africa cannot take full advantage of the commo … Pleschinger , an analyst at Morgan Stanley, said separately in a telephone interview from London. The rand lost 0.5 percent to 7.3723 per dollar by 5:50 p.m. in Johannesburg, from a close of 7.3325 yesterday. “The strength of the currency means South Africa cannot take full advantage of the commodity rally,” said Pleschinger. “The structural weakness of the current account is still there while high inflation will keep monetary conditions tight and limit a recovery in domestic demand.” The rand has rallied 27 percent this year as signs the global recession is easing boosted commodity prices and encouraged purchases of higher-yielding assets. The gains have hurt export earnings for commodity producers including Impala Platinum Holdings Ltd., the world’s biggest producer of the precious metal. “Quite clearly the strength of the rand is having a nullifying impact on profit, which has a knock-on effect on future cash flow and investment,” Impala Platinum’s chief executive David Brown said in a telephone interview today. “A rand weaker than where it is currently would be a lot more beneficial,” Brown added, declining to specify a preferred level for the currency. Morgan Stanley is “neutral” on the rand-dollar exchange rate and “cannot make a strong case to sell the rand outright” against the U.S. currency, said Pleschinger. Instead, the brokerage recommends taking “long” rand positions against the Turkish lira as the African currency’s carry trade advantage causes it to “outperform” the lira, said Pleschinger. A “long” is a bet an asset will appreciate while a “short” is a wager on depreciation. South Africa’s currency has returned 35 percent to investors who borrowed in dollars at low interest rates to invest in rand-denominated assets, a process known as the carry trade. South Africa’s 7 percent benchmark interest rate compares with rates of almost zero in the U.S., Europe and Japan. Pleschinger declined to provide a forecast for the rand’s exchange rate against Turkey’s lira saying it had not yet developed a “properly defined target level” for how the two currencies may trade against each other. To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.net Last Updated: October 9, 2009 14:53 EDT

Source: Rand to Weaken 3 Percent by Year-End, Morgan Stanley Forecasts By Garth Theunissen Oct. 9 (Bloomberg

(1) You can assess a company value by using what we call ‘asset values’. This type of valuation uses the balance sheet data to estimate value.
(2) Discounted cash flow technique which forecast a company’s data to estimate the present value.

Asset Values
This form of valuation is centered around the company’s balance sheet value as presented in the latest company’s filling or annual report.
As a prospective buyer, you might want to know that the value of a company’s assets less the value of any liabilities represents the net asset value. Net asset value is also called shareholder’s funds or the book value.

So, we have net asset value= assets- liabilities

In the second part of this article, we will go over the discounted cash flow technique in valuing a company.

After hosting a clothing party for about 15 of my closest gal pals over the weekend, I realized, they don’t really understand what I do. So I found myself explaining what it is I do and have done for over 10 years, plain and simple. Then it occurred to me. I bet there are a lot of people out there that are unsure of what a Fixed Asset Consultant really is.

My simple explanation of a Fixed Asset Consultant…

Q) Angie, what do you do?

A) I help companies of all sizes and industries determine the best ways to manage and track their fixed assets from start to finish.  Sometimes this requires me to write them an internal policy and procedures manual so that anyone within their company can understand the process.

Q) But Angie, what is a fixed asset?

A) A fixed asset is anything from a piece of furniture to a large piece of machinery equipment or a building, a vehicle, etc. that one uses for business and are generally put on a depreciation schedule.  Some are movable and some are not.

Q) Why is it important that your clients manage their fixed assets?

A) There are many reason’s why it’s important for companies to manage their fixed assets: theft, lower property taxes, receive write-offs on their federal taxes, have more accurate insurance coverage and know where they are actually located in case someone needs it.

Q) So are you an Accountant?

A) No, I’m not an Accountant, I only deal with fixed assets and everything about them.  Fixed Asset’s is like a niche of accounting.  It’s my only focus.

Q) Are there a lot of Fixed Asset Consultants out there?

A) No, there are only a handful that know what they are doing and do it well.  The firm I work with (and myself) work with every aspect of fixed assets.  Our term is, from cradle to grave.  Hence the reason we travel so much and why I miss out on a lot of parties.

If you have any questions related to “what is a fixed asset consultant”, please feel free to leave your comment and I will do my best to keep it simple.

Crazy About Your ASSETS!  Angie.

When a friend of mine needed to replace his computer last week, the sales person happened to mention that since he was buying the computer for his small business, and it cost more than $1,000, he could claim an extra tax deduction on the purchase.

This tax break forms part of the Australian government’s economic stimulus package, and although I’d read about it, I hadn’t taken much notice of it — or mentioned it to my friend.

This made me wonder if WWD readers in other countries were unaware of stimulus measures they could use. If so, note that if you’ve yet to submit your 2009 tax return, you may still be able to take advantage of the following benefits.

U.S. Tax Breaks for Small Business

Back in February, the U.S. government announced a series of tax benefits for business as part of the American Recovery and Reinvestment Act. The two that are probably most useful to most WWD readers include depreciation and deduction measures for new equipment purchases made in the 2008-2009 financial year.

• Deductions. According to Karen E. Klein at BusinessWeek, Section 179 of the new law “allows small businesses to immediately expense new equipment or machinery” up to a total of $250,000 ($117,000 higher than the previous year’s limit). The IRS explains that this tax break applies to “machinery, equipment, vehicles, furniture and other qualifying property placed in service during 2009.”
• Depreciation. The stimulus package also offered a one-year extension on the 50 percent bonus depreciation the government offers on new equipment purchases, which, Klein says, allows small business owners to “immediately deduct half of the cost of qualifying purchases rather than depreciating them over time.” To take advantage of this tax break, you must purchase and start to use the equipment (qualified tangible assets) in 2009.

Making the Most of the Breaks

While in July it was reported that these stimulus measures hadn’t had much effect, since they were introduced at a time when business credit lines were either tight or had dried up completely, it’ll be interesting to see the final figures once the year’s small business tax returns have all been submitted.

Speak to your accountant before you submit your tax return to make sure you’re claiming any purchases you made which are eligible for deduction or depreciation under the law.

Have you, or has a small business person you know, used these bonuses as a way to purchase new equipment for a business? Will you be benefiting from the stimulus package on this year’s tax return?

My daughter is bouncing up and down with excitement.  This afternoon she lost another baby tooth (her third to date) and she knows that the tooth fairy will visit her tonight and leave her some money.  I remember the feeling.  As a kid, whenever I lost a tooth I could look forward to finding a shiny new quarter under my pillow the next morning.  

Times have changed. 

These days the tooth fairy is a dollar skeptic.  I know this because instead of putting a quarter under the pillow, the tooth fairy now leaves an American Eagle for each tooth lost.  By the time my daughter’s adult teeth have all come in, she’ll be sitting on two pounds of silver (and unlike her father, she won’t be able to blow all her tooth fairy loot on Donkey Kong).

Perhaps the tooth fairy has been reading the recent financial news.  The Independent reports that Japan, France, Russia, China, and the Gulf Arab states have realized that the American dollar really is backed by the full faith and credit of the US government, and they’d prefer a reliable guarantee instead.  The US government’s debt is expected to reach 100% of GDP within the next two years, and “Helicopter” Ben Bernanke has created trillions of new dollars in the past year alone.  Given the astronomical amounts of money some of these foreign central banks have loaned the Feds to cover their wild-eyed bipartisan spending spree, one can understand why they might not appreciate being paid back with a rapidly depreciating currency like the US greenback.  This may explain in part the recent uptick in the price of gold, which has been mentioned as a possible replacement for the dollar in international transactions. 

It’s as if foreign central banks (and the rest of us, for that matter) are locked in an international game of musical chairs.  When the music stops, the last one holding dollars loses.  It won’t be easy for the countries that are sitting on trillions of US dollar reserves to divest themselves of their holdings without accelerating the currency’s demise, but for my part I hope they figure it out soon – and that they let me know how to do it, too.  I think I hear the music winding down, and I’m all out of baby teeth to leave under the pillow.

(Tooth Fairy painting by Jenedy Paige).

Part 1 Chapter 6

(This post is part of an ongoing project: a close reading of volume 3 of Kapital, one post per chapter. I hope that others who are tackling this book for the first time might find my summaries and thoughts useful. I also hope that others might leave their own thoughts, criticisms, help, etc. here so that this blog might become a good collective resource for those brave souls who take on Vol. 3.)

The Effect of Price Fluctuations

1. Fluctuations in the Price of Raw Materials, and their Direct Effects on the Rate of Profit

We begin with a repetition of the observation from the previous chapter that changes in prices of raw materials change the cost-price and therefore the rate of profit. (Marx is mostly referring to raw materials that form the circulating part of constant capital, not fixed capital, though later he can’t help but move briefly into this topic.) Higher cost-price means lower rate of profit and vice versa. Thus the cost of transport, the efficiency of world trade and the tariff system all play an important role in the way they effect raw material prices and profit rates.

Since raw materials pass directly into the product while fixed capital’s value is transfered a little at a time over the life of the fixed capital this means that price fluctuations in raw materials have more of a direct effect on prices and profit rates than fluctuations in fixed capital costs. As prices of commodities fluctuate so the demand for them fluctuates, causing expansions and contractions in the supply of the commodity on the market.

Marx, giving us a sneak preview into the soon-to-come explanation of prices-of-production, mentions here that these fluctuations of price would not be quite so extreme in a situation of average profit rates and prices of production. We are still assuming that commodities trade at their values. But if they traded at their prices of production instead, the formation of average profit rates would slightly soften this fluctuation in price caused by the fluctuation of raw material prices.

The increasing productivity of labor means that the same amount of workers produce more product per hour. This increasing productivity requires an increase in the raw materials. If workers are making twice as many shoes as before they need twice as much leather, rubber and thread. Thus the price of the commodity contains less and less labor, and less and less fixed capital value but more and more raw material value. Marx refers to this fall in the value added, per commodity, by labor and fixed capital as a “falling tendency” only counter-balanced by a decrease in the price of raw materials.

Marx ends this first section by noting (I think I am understanding this correctly) that when raw material prices grow inordinately high this causes manufacturers to make better use of waste product. We may see a similar process in our lifetime if prices in oil continue to fluctuate in ways the disrupt production.

II. APPRECIATION, DEPRECIATION, RELEASE AND TIE-UP OF CAPITAL

Appreciation or depreciation of capital refer to changes in the value of any of the factors of production after they have been purchased due to general changes in the economy. For instance, after purchasing a 100 barrels of crude oil the market price of oil might go up due to, say, a new war in the Middle East. What does this appreciation in the already purchased raw material inputs mean for the capitalist who has already purchased this oil? Or a capitalist may spend millions of dollars on a new, state-of-the-art, factory that makes cars only to find out that ten years later foreign car companies have invested in even more state-of-the-art factories at lower prices. How does this depreciation of fixed capital effect the profit rate? Marx intends to tell us in this chapter.

He also intends to tells us about the tie-up and release of capital by which he means this: In order for reproduction to occur a capitalist must devote a certain portion of the price of his products to reinvesting back into constant and variable capital. If he sells a football for $10 he can’t spend that entire $10 on booze and comic books. A certain portion of that $10 is “tied-up” in variable and constant capital. Now, if the price the food goes down and wages fall, or if the prices of raw materials fall this means that some of this previously tied-up capital is “released”. The capitalist can then choose to spend all of this released capital on loose-living and luxury goods or to reinvest in expanding production.

At the beginning of the chapter Marx notes that a full understanding of these factors, appreciation, depreciation, tie-up and release, really requires an analysis of the credit system and the world market. These are topics Marx was reserving for much later in his argument. Unfortunately he never got to them.

Now you may be thinking, “Didn’t we just spend a really long time investigating the effects of changes in the prices of constant and variable capital on the profit rate?” Yes we did. All of those prior investigations assumed that changes in prices happened between production periods, as if capitalists bought inputs at the beginning of the week, turned them into commodities which they sold at the end of the week, and then stepped into the market on Monday to encounter a whole new set of prices. In reality, at any given time parts of the total capital are in the market looking to buy or sell goods while other parts are in production making goods. This is why we need to look at appreciation and depreciation separately from our previous analysis. Remember that the law of value is the law whereby the production is regulated indirectly through market exchange. We produce with an eye on exchange. But we don’t know the full value of our product until we realize it in exchange. While one thing is happening in the private sphere of production quite another might be happening in exchange. Values are constantly changing as changes in productivity, circulation, and politics (tarifs, wars, etc.) effect the socially necessary labor time, socially necessary turnover time, monopoly pricing, scarcity rents, etc. (When we add the credit system to the mix an entirely new aspect of price fluctuations are introduced into the picture.)

If the price of cotton goes up then the prices of commodities that contain cotton go up. If I own a t-shirt factory and have already bought a year’s worth of cotton I will actually benefit from the appreciation of my raw materials. I can sell t-shirts at the new market price caused by the increased price of cotton. Because I bought my cotton at the lower, pre-appreciation, price I can pocket the difference as profit. The appreciation of my stock of cotton actually offsets the fall in profit usually caused by a rise in constant capital values. But if all the competing t-shirt making firms have also purchased a year’s worth of cotton the existence of cheaper cotton in our stock piles will press the price of t-shirts below this new appreciated price. The opposite process takes place if cotton prices fall.

This all make for some confusing results. If my capital looses value through depreciation this can still mean that my profit rate goes up since the profit rate is the excess of surplus value above the value of total capital. If my capital gains in value my profit rate my go down for the same reasons.

A discussion of appreciation and depreciation of fixed capital can’t happen without a theory of ground rent so this will have to wait till later in the book. But Marx makes some remarks about machinery here. If the use-value of machinery is quickly going out of date, this causes machines to loose their value- to depreciate- before the labor contained in them can be fully transferred into commodity form. To take my previous example of the US auto-industry, if I build a fancy new Ford factory in 1940 in Detroit and the Japanese build a much fancier and cheaper factory 15 years later this makes my machines depreciate. I can’t sell my cars at prices that will allow me to recoup my investments in fixed capital. I have to sell at the lower market price set by the Japanese. (Or I can resort to tariffs, lay-offs, attacks on unions, “buy American” campaigns, right-wing populism, etc.) Marx calls this “moral depreciation”. This means that when new machinery comes on-line there is often an urgent need to get the most product out of them before they depreciate. In Marx’ time this meant the prolongation of the working day in order to work the machine as much as possible before it became obsolete. We see similar logic today with the use of night-shifts and overtime in factories. (Slightly related is the desperate urgency to get the most profit out of intellectual property before the monopoly rents associated with it disappear.) This all means that the newest entrants into the market are often not the ones that profit from a new technology. They often go out of business because they can’t compete with new competitors. This devalues their fixed capital. The winners buy up this devalued capital at bargain-basement prices which allows them to have a huge profit margin.

Here, in a few paragraphs Marx lays out the part of the picture of the accumulation cycle that characterizes capitalist crisis. It is the coupling of this picture with the Falling Rate of Profit which allows us to see the way the “counter-vailing influences” against a falling profit rate play out in real time. We saw a few chapters back that the falling profit caused by an increase in organic composition can be offset by a falling price of constant capital. Here Marx shows how this works in a world in which huge amounts of investment go into fixed capital. When fixed capital prices fall we get moral depreciation which means a falling rate of profit which can only be reconciled by crisis and devaluation. This line of argument fits quite well with the description of the US economy in the last 70 years, especially the auto-industry. Marxists like Andrew Kliman, David McNally, Allen Freeman, David Harvey and others point to this moral depreciation of fixed capital as a key element in explaining the current crisis. It is this phenomena that Robert Brenner mistakes for competition in his competition-centered account of crisis in “The Economics of Global Turbulence.”

________________________

“There is still variable capital to be considered. “

Obviously- if the means of subsistence appreciate then wages must go up and surplus value falls. The opposite happens with depreciation.

If a capitalist is used to reinvesting so much a week in wages and the wage begins to fall this will then free up some of that variable capital. Some of the variable capital is “released” and become surplus value. This can be used for new golf clubs or vacations to Buenos Aires or it can be reinvested in production. This makes it possible to expand production by hiring more workers to exploit. The opposite happens with an appreciation of wages. More capital is “tied up” in variable capital which means that if production is to continue at the same scale money must be taken out of the surplus value and spent on variable capital. The rate of surplus value and rate of profit falls.

Marx makes the distinction in this section between the effects of this appreciation or depreciation on newly invested capital or previously invested capital. If depreciation effects a newly invested capital all this does is to change the rate of surplus value and profit. If it effects a previously invested capital this depreciation releases variable capital for new investments.

——————————————————–

“The release and tie-up of variable capital, just analysed, is the result of a depreciation or appreciation of the elements of variable capital, that is, of the cost of reproducing labour-power.”

But variable capital can be released by changes in productivity as well. If productivity increases make is possible to get the same amount of commodities out of half as many laborers this means a releases of variable capital. However, as we have already seen, this most often goes along with an increased need for raw materials which means a tie-up in constant capital costs. The relative amounts of the release of variable capital and the tie-up of constant capital determine the effect on profit rates.

Usually a tie-up of more constant capital goes along with increasing productivity but it can also correspond to the opposite. In agriculture, if the fertility of land is declining, more and more constant capital will be needed to get the same amount of product from the land. Here declining productivity ties-up more constant capital.

As constant capital in the form of raw materials starts to take on more and more of the day-to-day cost of production, price changes in raw materials have more violent effects on profit rates. Fixed capital costs are long-run costs and don’t depend much on the day to day fluctuations of prices. But raw materials must constantly be replenished and thus can cause endless fluctuations.

This is especially true of raw materials whose production involves natural forces out of the control of man. Agriculture is the chief example here. A bad harvest, a blight, etc. can make agricultural prices fluctuate. The products of nature are not nearly as steady and predictable as the products of purely human labor in other spheres of production. Agricultural production also can’t immediately increase or decrease to meet fluctuations in demand. Production is planned around yearly crop  cycles and can’t be adjusted until the beginning of the next planting season. This means that there can be shortages and gluts of agricultural goods.

Fixed capital tends to grow steadily- or even rapidly. This means that there is always a growing need for raw material inputs. This leads to overproduction of machinery and under-production of agricultural goods. And this means higher prices in the agricultural sphere.

In times of spikes in raw material prices capitalists often band together in associations to stimulate production of raw materials. This is one of many ways capitalists act collectively as a class when they are threatened as a class. But as soon as production returns to normal the capitalists return to open competition on the market and their ideology of “free trade”. Funny how disposable economic liberalism is when the capitalist class is threatened. Funny also how the libertarian/neo-liberal/Austrian argument is always that these trusts and other such associations are an imposition upon a rationally functioning market when it is clear from this and countless other examples that just the opposite is the case: these are attempts by the capitalist class to impose order upon an irrational market. Marx concludes this segment by saying that capitalism is totally irrational from the standpoint of agricultural production. It requires “either the hand of the small farmer living by his own labour or the control of associated producers.” Is it no wonder that today the agricultural industry depends on massive subsidies and tariffs?

_______________________________________________

The last bit of this section lists examples of the above arguments. There are 1858 factory reports about spindle and looms growing faster than sheep. From the same year Marx quotes reports of the cotton trade not being able to keep up with the increase in self-acting mule spindles and looms. This leads us to the 3rd and final part of the chapter.

III. GENERAL ILLUSTRATION. THE COTTON CRISIS OF 1861-65

This might be painful. I have more or less just summarized the history Marx gives. Why have I done this and should you bother reading it? I don’t know the answer to either question. I think I did it to help me understand the gist of the argument. Feel free to skip all of it. I will make a few remarks at the end in summary.

Preliminary History 1845-60
1845: “Golden Age” of cotton. Cotton prices are low and factories are growing.
1846: Factory capacity has already outpaced cotton production. Cotton prices are rising and factories are working short-time (less than full days) because of shortages. Finished cotton products have saturated the market which means that their prices can’t rise to compensate for the rise in raw material prices.
1847, October: A money panic, shortages continue. I assume that the money panic doesn’t relate to the cotton problem. Marx doesn’t expand much on this.
1849: A recovery happens. Perhaps some of the demand which is stimulating production comes from consignments… (Here we allude to the way credit can displace crisis). Cotton prices have fallen considerably allowing production to continue. This fall in price is not explained in the manuscript (unless I am overlooking something.) As the recovery accelerates large producers start to stockpile cotton supplies, causing anxiety for smaller producers.
1850: Scarcity of cotton resumes and prices rise.
1853 April: Prosperity again.
1853 October: Overproduction of cotton. Depression in the industry.
etc. etc.

1861-64. American Civil War. Cotton Famine. The Greatest Example of an Interruption in the Production Process through Scarcity and Dearness of Raw Material

Here Marx discusses the history of the Cotton Famine in England which was caused by a blockade on American cotton imports in 1861 after the start of the US civil war. There was a huge shortage of cotton just at a time when the market had been over-saturated through overproduction. A severe crisis ensued and huge numbers of workers lost their jobs and had to go on public assistance. Wikipedia has a good, brief history: http://en.wikipedia.org/wiki/Lancashire_Cotton_Famine

1860: The massive expansion of investments in mills and other fixed capital continues while a shortage of cotton begins. (I assume this shortage comes from people hoarding cotton in anticipation of the blockade the following year.) Prices are rising and people are beginning to look for new sources of cotton. There is talk of expanding railroads to India in search of cheaper raw materials. India is already helping absorb the excess production from England. This is still the two-part function of a colony today: absorb excess capital, provide cheap raw materials.
1861: It becomes obvious that manufacturers overproduced in the previous year. It takes several years for the market to absorb all this excess production. Cotton prices are way too high due to the blockade and there is a huge shortage of cotton on the market. Many of the bigger firms stockpiled cotton. The value of  this hoarded cotton appreciated  which averted the usual depreciation of the total capital that we might expect in a crisis.

Manufacturers begin adulterating their cotton products by adding other stuff to the cotton in the spinning process. They weave in flour which increases the weight of the products but, of course, lessens their use-value. These substitute materials are harder to work with and break more and so this lowers the productivity of labor. Hours are decreased, wages start to fall and strikes break out.

1862: Unemployment is high, in some districts as high as 15% with larger numbers working short-time. Many producers are small-scale capitalists and they are hit particularly hard by the crisis. Inferior cotton is being used everywhere which slows down production.
1863: The inferior cotton slows down production thus having a severe effect on wages. The cotton workers are on a piece-rate system. This means that the slower they work the less they earn. Wages sink to almost nothing. Meanwhile workers are being fined for making inferior products.
Unemployment and underemployment sky-rocket. The public relief committees employ workers at poverty wages in public works: street paving, rock breaking, etc. Any worker who complains about the wage is struck from the relief rolls. Marx points out that this drastic devaluing of labor power is a great gift to the capitalist class. Urban development is given a free gift from the industrial reserve army.
1884: The public works employ so many people that is becomes hard to keep wages down. The reserve army of labor dwindles and strikes break out in factories. This will not do for the bourgeois who protest until the Public Works Act is repealed. Though the capitalists class looks to free markets and global trade to eventually bring cotton supplies back to normal and absorb surpluses they don’t advocate the mobility of labor. The bourgeoise work against allowing emigration of workers from the cotton factory districts.

And here the manuscript breaks off…

What can we learn from this history? Obviously it is a great example of many of the themes of the chapter: changing prices of raw materials, appreciation and depreciation, agricultural production cycles not synching up with the rhythm of capital accumulation… I’m sure that in Marx’s time there were diverse opinions as to the cause of the crisis. For many it was probably seen as the result of external political causes. But Marx brilliantly outlines the variety of complicated factors the all weave themselves together. We notice that he begins his story before the blockade caused by the American Civil War. Thus he already establishes a cyclical rhythm of boom and bust caused by over-production and the delay in agricultural production to respond to the market signals being given by the industrial sector. Once the external shock of the cottage shortage is introduced, this boom and bust cycle is taken to an extreme. Not only is Marx able to highlight the way in which this external shock merely amplifies an already existing industrial-agricultural cycle, but he also makes some keen observations about the way in which the capitalist class acts as a class to preserve its class interests in such times of crisis. We might take these themes to heart in our own time. It would be easy to blame the crisis of the 1970’s on the OPEC crisis as many historians do. It would be easy to blame our present crisis just on the sub-prime bubble, or our own oil prices. But the problems caused by these fluctuations in prices only serve to expose much more fundamental rhythms of capitalist accumulation. As in the cotton crisis we can see the capitalist class today acting as a class, through the the state, to preserve itself.

next chapter

Once all your data is either –  a) in Sage FAS from being uploaded through a data’s conversion process or b) manually changed (changing either the cost, method, life, etc.), there are only three types of adjustments you can set Sage FAS Asset Accounting to take:

1. Immediate -  the next time you run depreciation in Sage FAS Asset Accounting, the system will automatically true up the adjustment immediately for you. 
2. Post Recovery - after the assets estimated life has expired, the adjustment amount needed will show it’s pretty little head as the NBV.  The very next time you run depreciation AFTER it’s useful life has expired, it will true up.  Example: est life of 3 years/36 months – month 36 you will see the remaining NBV.  When you run depreciation on month 37, FAS will perform a true up.
3. None - well… don’t second guess yourself silly, FAS will do nothing.  This means, your assets that need a true up will always have a NBV forever… until you dispose of it.

There are only two types of adjusted assets: over depreciated asset(s), or an under depreciated asset(s).  No worries, should you set your adjustment to either immediate or post-recovery in Sage FAS Asset Accounting, the system is pretty darn good at reporting on those assets that needed a true-up.  Reason number…. I don’t know, a lot; why Auditors love this solution!

Fun Fact: the big 4 uses and recommends the Sage FAS solution!

Influence decisions on pricing and profitability

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Hey buddy,

There’s this term in economics called depreciation, and we’re concerned you’re not aware of it.

Let’s put it this way.  When you came out, you were a hot commodity, you got yourself a smoking hot boyfriend, and then you did nothing…

…and he dumped you.

…but, that was o.k. You rebounded with a hot Brazilian model (o.k. Pedro’s skull was a little large)…

Now you’re dating some reportedly straight, fugly, personal trainer named Sebastian Leal.

We’re sure that, at heart, you’re still the same doughy bottom nice guy that you always were, but your once hot property has decidedly cooled.  You should probably cut your losses and marry the straight dude because you’re one step away from your next long-term relationship being this:

We’re concerned!
(and we don’t think we’re being unreasonable, here!)

XOXO, Peench and Dr. Feel