GST on Gold Selling

As questionable it may be, gold selling is a way to make money. Like any other Australian business, a Australian gold seller may get taxed on their proceeds, and if they have not been declaring such income on their BAS (business activity statement), they may well be running up a tax debt...

Josh, as well as his friends Guy and Sandy, have dipped their toes into the grey market, and are now wondering if they will have to pay GST (Goods and Services Tax). Unfortunately, they find the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) too daunting to find out themselves. Will you be able to help them?

This problem has been taken out of Understanding Taxation Law 2011 (see bibliography for full citation), and the GST Act as of 1 November 2010 has been referred to.

How to attract the tax collector
In the GST Act:

• s 7-1 says that "GST is payable on taxable supplies and taxable importations".
• s 9-5 says that a taxable supply is made if a supply is made for consideration in the course or furtherance of an enterprise carried on, if it is connected with Australia and the supplier is registered or required to be registered.

Lemon Dungeoneers

In 1970, economist George Akerlof released a journal article about the used car market. In it, he drew the distinction between cherries (good cars) and lemons (faulty cars), and predicted how those selling cherries would be driven out of the market (and conversely how the proportion of lemons would increase).

There is often comment by World of Warcraft players how they would, at times, join a sub-par pickup group (PuG) and resultingly endure an excruciating dungeon run. The 'market' for dungeoneering 'labour' may well degenerate similarly, for the fellow dungeoneers likely do not know how skilled each other is.

The thing about asymmetric information
In the lemon market as described by Akerlof, it is asymmetric information that drives cherries out of the market. In such a market, the buyer does not know much about the quality of the seller's product so as to form a price. In the used car market example, the used car has many parts hidden away from view, so the buyer cannot completely know whether the car is free from defects. As a result, they make a best guess that the car is of 'average' quality and so will be willing to pay an 'average' price.

Gift Card Creditors

Last February, REDgroup in Australia entered into voluntary administration after finding it difficult to pay off debts. Owning the Borders and Angus & Robertson bookstore chains in Australia, the administrators demanded that gift cards issued by these stores only pay for half the cost of purchases; the remaining half would have to come out of the customer's pocket.

As customers are accustomed to gift cards' applying to the full cost of a purchase, this caused quite an uproar, with sales staff being abused despite no fault of their own. However, this gesture may well have been a generous one considering how liquidation works, for gift card holders are creditors to the issuing business.

Gift cards are debt
The Framework for the Preparation and Presentation of Financial Statements (AASB) concisely defines a liability as:

...a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

Tax-Effect Accounting 101 for Australian Businesses

Governments levy taxes on individuals and businesses to finance its activities and/or (in the economic spirit of things) discourage certain certain activities. More likely than not, a business will be required to pay tax on its income. In doing so, that business would need to look at its accounts to determine the tax that is payable (or, if they are doing badly enough, how much they can claim from the tax agency).

The amount of tax a business needs to pay is often a fixed percentage of the profit they earn. Generally, where they earn revenue, the tax payable increases, while incurring expenses decreases tax payable.

If the business is operating in Australia, among others, it would need to follow the accounting standard AASB 112 Income Taxes, which, in general, would require two things:

1. Calculating current tax payable by reconciling from the accounting profit recorded for the year
2. Calculating deferred tax by recognising the differences between the accounting and tax balances of assets and liabilities

Vision’s Incentive Systems: A Case Study

Every World of Warcraft raiding guild aspires to progress through raid content in a timely pace. Most members of the raiding corps focus on attaining gear and other goals, and so cannot be expected to directly satisfy the guild’s purpose. Thus, the guild must facilitate this indirectly by setting compatible goals, and then motivate raiding members to achieve them.

Human Resources (HR) departments of real-life companies handle these issues regularly, and the officerships of ingame guilds are no more exempt. I will introduce the theories associated with incentive systems, then apply them to analyse the incentive systems of my current guild, Vision of Frostmourne US.

Resources and Their Sources

Accounting is a practice that allows someone (or something, in the case of an organisation), the accounting entity, to keep track of their economic and financial details. It involves accounting for their economic resources, as well as the sources from which they are obtained.

In early accounting practice, businesses would keep separate lists of their resources and sources. It was soon discovered that both can be linked. Thus came double-entry accounting, where every transaction that is recorded would recognise both and implicitly relate the two together.

All accounting entities strive to accumulate resources, while being careful of how they finance them. Those resources help to satisfy the accounting entity’s economic wants by providing economic benefits.

The Time-Value of Health

This blog post builds on the concepts suggested in 'Not All Hitpoints are Created Equal', helping to adjust healing for the health level of the recipient.

Experts in finance speak of the time-value of money. Under this concept, the value of a certain quantity of dollars (or other currency) will decrease as time passes. Many attribute this to the fact that people want money now rather than later. Therefore, to keep this time-value the same, interest must be paid on top of this quantity of dollars.

Hitpoints restored by healing also seem to have this time-value, since a heal of the same size will be more valued the sooner it is received (considering that people wish to keep their health at a maximum). How should such heal weighting be done?

Making Sense of Financial Statement Ratios

Many basic features of a business' business can be gleaned from their set of financial statements. However, the more intricate details can be found through ratio analysis.

The financial statement's figures are measured in currency units, which have little value in themselves because they do not consider the scale of business operations. By comparing relative sizes of these figures, this problem with units of measurement are eliminated by removing the units entirely. The resulting ratios are scale-free and can be used in comparing:

• Two businesses of different sizes
• The same business as it grows (or collapses) over time.

Analysts have devised myriad ratios to use in this type of analysis. What do they mean in real-world terms?

Not All Hitpoints are Created Equal

There is always question on whether the output of healing meters (healing charts) can be used in indicating a healer's performance. Unlike points of damage, where heals go matters. While everyone has use for a heal, some players will need it more than others.
 Healing meters (such as the 'Healing done' component of Recount) collect raw figures from the combat log. It becomes easy to assert, from skimming over the healing chart, that all hitpoints (HP) are created equal, with all players appreciating 1 HP of healing equally. However, I would not.

1. Factoring in absorptions
When a player inevitably takes damage, a healer can respond to it in any of two ways:

Writing Cheques

A cheque is a written instruction by a person (the drawer) to their bank (or other financial institution) (the drawee) to pay cash to another person (the payee). It must not be subject to any conditions. While cheques are not commonly used these days, many drawers still enjoy the delay in its clearance if they consider the payee suspicious.

There are several markings made on a cheque, which essentially answer the following questions:

1. Should the cheque be cashable by any bearer of the cheque, or only by the payee named on it?
2. Should the cheque be able to be redeemable in cash at the bank counter, or should it be credited to a bank account?
3. Does the payee want to make the cheque payable to another person?
4. Should 3. be allowed to happen?

1. Bearer and Order cheques

• If a cheque is payable to bearer, the person who presents it to the bank counter can cash it for themself, regardless of who is named payee on it. A bearer cheque will have the words "or bearer" or no such additional words printed on it, such that, if the payee is named A.B., the instruction reads "Pay A.B. or bearer", "Pay cash or bearer" or "Pay cash".
• If a cheque is payable to order, only the payee has rights to cash the cheque. An order cheque will have the words "or order" or "to the order of" printed on it, such that the instruction reads "Pay A.B. or order" or "Pay to the order of A.B.".
• A bearer cheque can be made payable to order by crossing out the words "or bearer", such that it reads "Pay A.B.". An order cheque can be made payable to bearer by not stating a name or making it payable to either "cash" or a fictitious person (e.g. "I love you"). The instruction for the 2nd case would read "Pay cash or order".

2. Cheque crossings
A cheque is crossed when two parallel lines are drawn along the cheque's face. Doing this means that the cheque cannot be redeemed in cash at the bank counter, and so must be credited to a bank account. If the cheque is not crossed, it becomes redeemable in cash.

3. Indorsements
For a cheque payable to order, the payee (acting as transferor) indorses the cheque when they write instructions on the cheque to make it payable to another person (the transferee). If the transferee is named X.Y., it would read "Pay X.Y. {signed} A.B.". Since a cheque payable to bearer can be cashed by anyone, there is no need for any indorsement for them.

4. /NOT NEGOTIABLE/
A bearer cheque is crossed 'not negotiable' when the words "NOT NEGOTIABLE" are written between the parallel lines. Most importantly, this means that the payee will not be able to indorse the cheque. However, this also means that, if the bearer stole the cheque from another person, they do not have ownership rights to the cash. Both of these cases mean that:

• The bank is not obliged to cash the cheque for the bearer.
• If the bank cashes the cheque, the drawer suffers a loss and they can sue the bank for related damages.

Also...
"Cash" is not a true entity, but rather it signifies that the cheque should be payable to bearer. It may be baffling, but solace can be taken in the instruction's making grammatical sense.

It is interesting to note that any marking made reduces the rights of other persons to cash the cheque. For example, if "or bearer" is crossed out in a bearer cheque, it becomes payable only to the named payee, while a similar marking over "or order" in an order cheque keeps it an order cheque payable only to the named payee. When a marking is made (presumably in pen), the only way to void it is for the drawer to cross it out and sign it off. These schemes support the nemo dat rule:

Latin: nemo dat quod non habet
English: no person can pass a better title than they possess