Sorry, not trying to be difficult, but this doesn't clear things up for me. Are you saying that Tesla does not lease directly to the consumer?

Yes, that's right. They present it as if it were direct, but they're really just acting as a front for a third-party bank. They don't have their own finance arm.

Ok, got it now, thanks.

Any idea why they have to list automotive leasing as a separate line item on their report? If they are selling it to a bank who is then responsible for the lease, why list it separately?

Good question! I went poking around and turned up this article:

http://seekingalpha.com/amp/article/3988503-gaaps-treatment-...

If I understand it correctly (probability: moderate?) then it's basically an accounting artifact. The fact that Tesla arranges the lease means they have to book the revenue differently. Somehow....

Nice find, that helps. My reading is that it's slightly more than an artifact: Tesla is guaranteeing a residual, so the sale to the bank is conditional and so cannot be recorded as a simple sale.

GAAP strikes me as a set of things that, alone, are good intentions but combined are more confusing than they need to be.

>GAAP strikes me as a set of things that, alone, are good intentions but combined are more confusing than they need to be.

That's probably reasonably accurate. GAAP is intended to prevent various accounting reporting practices that, historically, were sometimes used to obscure material aspects of a company's financial position. However, GAAP numbers may also present a company's numbers in ways that aren't the most meaningful or "fair"--at least in the eyes of the company. That's one reason that companies often present both GAAP and non-GAAP results.

Makes sense. And thanks for your persistent questioning, I learned some new stuff!

Thanks for your patience :) I learned some new stuff too!