These are just some idle thoughts about the accounting implications of all this. Presumably the WT, a 'legalistically-minded' conglomeration of corporations with large legal/accountancy departments will have considered this.
1. Were the loans to KH congregations secured by a 'charge' on the Title Deeds or were they effectively legally unsecured?
2. The loans would have appeared in WT balance sheets as assets.
3. In the UK each congregation is (as I understand it) an individually registered charity. The WT loan would appear as a liability.
4. If the loans are forgiven (would any legal charge on the deeds be removed? Must be, I would think.) the capital value of the WT would reduce (less assets), the capital value of the congregation would increase (less liabilities).
5. I understand that WT loans were interest-free, so as far as WT accounts were concerned the repayments were 'repayments of capital' rather than 'interest income'.
6. The 'new light' arrangements seek to replace the 'repayments of capital' with 'donations'. The one-off 'donations' from standing congregation accounts would affect local KH balance sheets by reducing their capital by the amount of that donation.
I'm just thinking out loud here, and without knowing all the amounts involved it's difficult to asess the impact. But you can bet that WT have considered all this and the amounts involved are substantial.
A simple example - I don't know how realistic it is : A congregation had a £30,000 WT loan, bank balance of £7,000 and the KH is worth £60,000. Capital value is £60k + £7k =£67k - £30k = £37k. After the 'new light' it's worth £60k + (£7k - £5k) = £62k. The WT has lost £30k in capital, gained £5k in 'donation income'.
Is there some reason why WT would want to shed capital value? Of course, any funds it did give to congregations for rebuilding etc. would show in the accounts as charitable distributions of donation income received.
I can't believe that WT would not have done all this without thinking it through and without it being to WT's advantage. This is big usiness, after all.
