Marc Hasenfuss Editor-at-large

Jebb McIntosh, CEO of perennially profitable vehicle retailer Combined Motor Holdings (CMH), is hardly mellowing with age. In recent years, his commentary accompanying the firm’s financial results has become increasingly sharp around political and economic issues. In CMH’s latest set of results, McIntosh lashes out at ever-changing number-crunching rules, raising concerns around "the disturbing impact which some accounting principles can have on the economic realities of business". Specifically, he raises the ridiculous way in which the company has to account for its numerous property leases: an accounting principle requires the rental charge to the income statement to be equal for each period of a long-term lease. As he succinctly notes, no allowance is made for the fact that lease payments are adjusted annually to recognise the effect of inflation and high interest rates on property values and required returns. While the degree of distortion is negligible in major economies where ...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now