If you've been following the Trump civil fraud trial, you'll know that we've seen Weisselberg and Don Jr. testify that they really didn't know anything about Generally Accepted Accounting Principles. But, hey, GAAP sounds complicated, and indeed it is . . . though this the first time I've heard of a CFO having anything less than an ironclad grasp of it. Here's the thing, though: the main GAAP issues that are actually important to the case are extremely simple. How it works: Here, in this link, is the most recent balance sheet from Apple. All balance sheets look roughly like this, differing only in their values or that you may have some unused accounts that are left off. You'll notice there are three main buckets that everything else flows from: assets, equity, and liability. Click the drop-downs for those categories. Those sub-categories are what are called "accounts," such as cash under assets or current debt under liabilities. Here's the important thing: all of these account values are based on historical values and historical transactions and there ARE NO SPECULATIVE VALUES, such as brand value or market value. The money values here are purely based on actual transactions that have transpired. The properties you have bought go into your assets and retain the same value there that they had when you bought them based on what you paid for them. Market value is ignored entirely. When you sell them, that will hit the balance sheet based on the value you sold them for. There. After reading a single paragraph, you now know more about GAAP than anyone in the Trump Org. I'm serious. There is no situation in which you can add brand value or intangible assets to your books and be GAAP compliant unless there is a transaction involved, such as if you buy a trademark. When a bank or insurance company asks for your balance sheets and you turn over balance sheets that hide brand premiums in the assets, you are committing fraud. Period.
