GAAP Asset Useful-Life Compliance & Audit Evidence Platform

$nvidia $Palantir For those interested in Burry's claims that there may be fraud by companies extending the useful life of their chips to fraudulently inflate their earnings. First, they can't do it for tax purposes. So it's only under GAAP. He's supposedly saying that Palantir and Nvidia are overvalued and they may well be, but if he looked at history of big tech, he'd realize that overvalued stocks often becine fairly valued over time with growth without the share price falling. So his put strategy likely won't work out absent a huge macro event. I'll summarize (with the help of AI) the steps, expert reports and auditor reviews that need to be completed before they can change estimates of useful lives under GAAP. It's not easy and these large companies would have to have the fraud cooperation of internal people, expert consultants and most likely every major accounting firm. I want to know what he's smoking. But it's more likely he's trying to use his reputation to scare people so he can profit short term. To change an asset's useful life estimate under GAAP, even without a major repair or capital improvement, you need sufficient, contemporaneous, and verifiable evidence to support the decision. The change must be based on new information or a reevaluation of existing conditions, not merely a desire to manipulate earnings.  Auditors and accounting standards require strong documentation of the factors that justify the revision:  Required Evidence and Documentation  Engineering or Specialist Reports: A formal assessment from an internal engineer or an external specialist/appraiser is strong evidence. This report should detail the physical condition of the asset, expected wear and tear, and the technical basis for the extended operational life. Historical Maintenance Records: Robust, consistent maintenance records that demonstrate better-than-average upkeep and condition of the asset compared to industry standards can justify a longer life estimate. Changed Usage Patterns: Documentation showing that the asset's use has changed (e.g., switched from high-volume, maximum-capacity operation to occasional use) can support a revised estimate of wear and tear. Industry and Market Data: Evidence that comparable assets in the industry are reliably operating for longer periods than initially assumed, perhaps due to general improvements in technology or operational practices, can be used as supporting information. Absence of Obsolescence Factors: Documentation confirming that the asset is not becoming technologically obsolete, and that there are no significant adverse changes in the market, economic, or legal environment that would shorten its life. Management Justification Memo: A formal memorandum from management outlining the nature of the change, the reasons for it, and the data points that support the new estimate. This ensures a clear audit trail and demonstrates due diligence in the estimation process. Consistency with Business Strategy: Evidence that the revised estimate is consistent with the company's future objectives and strategy regarding the asset's continued use (e.g., plans to continue using it in core operations for an extended period).  Key Accounting Considerations  Avoid Manipulation: The change should be a genuine reflection of new facts or circumstances, not an arbitrary adjustment to meet financial reporting targets (e.g., boosting current period earnings by reducing depreciation expense). Materiality: If the change has a material effect on the financial statements, GAAP requires specific disclosures in the notes to the financial statements, explaining the nature and the effect of the change on income from continuing operations, net income, and per-share amounts.  In essence, the evidence must be sufficient to convince an auditor that the previous estimate is no longer the most appropriate measure of the asset's economic reality and that the new estimate is more relevant and reliable