The Hindu Business Line : The devil is in the definitions

"IF Hitler invaded hell, I would make at least a favourable reference to the devil in the House of Commons," Winston Churchill once said, but here is Nicholas von Hoffman allowing a horned fiend to invade the world of finance and work, in A Devil's Dictionary of Business, from Avalon (www.avalonpub.com) . Because, "It pays to heed the devil because business is an unknown land even to the tens of millions who live in it," reasons the intro, even while promising not to burden the reader with "economics, government, grand theories, sweeping statements, patriotic exhortations, high level abstractions, dogmatics, proven truths, wonky expositions or immutable doctrines."

Strictly business, therefore, though business as unusual; such as of `accounting' having picked up "a reputation as a less-than-a-laugh-a-minute occupation," and of `accrual' to mean `counting money that isn't there.' On `audit', there's just the stuff your CA won't like to read: "Some audits are less than full, and some auditors are lazy idiots who fail to look where they should, and some auditors take bribes from their auditees, so sometimes it pays to audit the audit."

On the basis of `basis point,' that is, `one-hundredth of one per cent,' here's clue: "For the thick of tongue and the impatient, it is better to say `eleven basis points' than `eleven-hundredths of one per cent."

`Bull market' is a period that goes with "a rise in the consumption of costly French wines and a drop in sexual harassment cases" - an insight, that is, worth collecting empirical evidence about.

Bretton Woods, you may know about, but what is `Buttonwood Agreement'? "The first of endless efforts to clean up shady practices in the stock market business, even before there were any stocks to buy and sell." And what do you call "a worthless agreement enforceable at law, at enormous cost, great peril, and vast frustration"? `Contract'.

Try this quick accounting 101: Beware `contingent liability', for it is "a snake in the grass or a snake in the footnotes of a company's financial report... a possible future bad news"! `Depreciation' may sound drab but it is "the subject of much arm wrestling, since there are tax consequences".

And the devil's definition of `due diligence' is that sometimes you can't just go through the motions of doing something you've agreed to do but must shake a leg and get out there.

`Dividend' is what you eagerly await, but the author points out that some companies make the amount so small that "the postage on the envelopes they send the dividend cheques in costs more than the amount of the dividend". Earnings may seem easy to define, but please note that `retained earnings' are not retained by you!

What about `EBITA'? "When you see this term, run like hell." To know why, you may need a session with the devil, though.

`Job creation' is a much bandied-about phrase as in `It'll create new jobs'; but the imp cautions: "Whenever these words are spoken, you may be certain that somebody has a hand out for public money to pay for one of those lalapalooza money losers."

Another commonly meddled-with phrase, `middle class' is "a subsection of the population that includes everybody, oddly enough".

A few one-liners culled from the book, to cheer you, are: `Exposure' - any threatening financial blow to the corporate belly. `Goodwill' - the difference between what a company is worth and the price somebody pays or overpays for it. `Thinking outside the box' - is said by one who doesn't know where the box is or what's in it. And, `your call is very important to us' - it is not!

To sum, let me borrow a quote of Stephen King: "The devil's voice is sweet to hear."

SayCheek@TheHindu.co.in

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