2021 Cost Cap Rumours and Speculation

[dans79]

That reads that if they brought an updated chassis to both cars in the last race of 2022, and count it on 2022 budgets, at least the cost of the 2 single race-used chassis would not be counted in 2023. That can save like 1m off the top.

look at the definitions, they are basically saying you can't count the cost an item until it's actually used.

"Used Inventories" means Inventories held at the end of the Reporting Period for future use in
respect of the F1 Team’s F1 Cars, that have been used in respect of the F1 Team’s F1 Cars in the
Reporting Period, excluding Transitional Carry Over Inventories.

"Unused Inventories" means Inventories held at the end of the Reporting Period for future use in
respect of the F1 Team’s F1 Cars, excluding Transitional Carry Over Inventories and Used Inventories

I believe this is what Toto and his off the truck comment was about, as well as what was mentioned throughout the year by other members of the paddock.

[dans79]

That reads that if they brought an updated chassis to both cars in the last race of 2022, and count it on 2022 budgets, at least the cost of the 2 single race-used chassis would not be counted in 2023. That can save like 1m off the top.

look at the definitions, they are basically saying you can't count the cost an item until it's actually used.

"Used Inventories" means Inventories held at the end of the Reporting Period for future use in
respect of the F1 Team’s F1 Cars, that have been used in respect of the F1 Team’s F1 Cars in the
Reporting Period, excluding Transitional Carry Over Inventories.

"Unused Inventories" means Inventories held at the end of the Reporting Period for future use in
respect of the F1 Team’s F1 Cars, excluding Transitional Carry Over Inventories and Used Inventories

I believe this is what Toto and his off the truck comment was about, as well as what was mentioned throughout the year by other members of the paddock.

edit: plus you have this as well.

the cost of an item of Used Inventories must be recognised in full as
an expense in the Full Year Reporting Period in which it was first used
in respect of the F1 Team’s F1 Cars;

[bonjon1979]

You could introduce an updated 2022 chassis on the 2022 budget. Then use that for 2023 at zero cost to 2023 budget.

I suggested this month's ago as to a way for backmarkers to catch up in other areas for 2023.

Having had time to dig through the financial rules that's not correct.

article 4.1 f

If the accounting treatment of Inventories within Total Costs of the Reporting
Group varies from the following requirements, the F1 Team must make an
adjustment in the calculation of Relevant Costs to reflect these requirements:

(i) the cost of an item of Used Inventories must be recognised in full as
an expense in the Full Year Reporting Period in which it was first used
in respect of the F1 Team’s F1 Cars;

(ii) the cost of an item of Unused Inventories must not be recognised in
the Reporting Period; and

(iii) the cost of an item of Redundant Inventories (which has not been
recognised in a previous Full Year Reporting Period pursuant to any
other provision of this Article 4.1(f)(i)) must be recognised in full as an
expense in the Reporting Period. Where practicable, the identification
of Redundant Inventories must be carried out on an item-by-item
basis. Otherwise, groups of similar items may be considered together

That reads that if they brought an updated chassis to both cars in the last race of 2022, and count it on 2022 budgets, at least the cost of the 2 single race-used chassis would not be counted in 2023. That can save like 1m off the top.

Gosh, you can see how messy this could be. ‘We made these extra wings that we didn’t use, it cost us £15 million…so that gets knocked off right?’. I’m exaggerating for effect, but one can see how doomed this cost cap idea is because all times will try and do something sneaky. Feel like we need to have some sort of confirmation soon from FIA about how much is actually being argued over here. The longer it goes on, the more it feels like there is something to hide.

[Zynerji]

That reads that if they brought an updated chassis to both cars in the last race of 2022, and count it on 2022 budgets, at least the cost of the 2 single race-used chassis would not be counted in 2023. That can save like 1m off the top.

look at the definitions, they are basically saying you can't count the cost an item until it's actually used.

"Used Inventories" means Inventories held at the end of the Reporting Period for future use in
respect of the F1 Team’s F1 Cars, that have been used in respect of the F1 Team’s F1 Cars in the
Reporting Period, excluding Transitional Carry Over Inventories.

"Unused Inventories" means Inventories held at the end of the Reporting Period for future use in
respect of the F1 Team’s F1 Cars, excluding Transitional Carry Over Inventories and Used Inventories

I believe this is what Toto and his off the truck comment was about, as well as what was mentioned throughout the year by other members of the paddock.

Did u even read my post? You are making my point, 100%.

[dans79]

Gosh, you can see how messy this could be. ‘We made these extra wings that we didn’t use, it cost us £15 million…so that gets knocked off right?’. I’m exaggerating for effect, but one can see how doomed this cost cap idea is because all times will try and do something sneaky. Feel like we need to have some sort of confirmation soon from FIA about how much is actually being argued over here. The longer it goes on, the more it feels like there is something to hide.

I've gone through the rules once and they seem decently strait forward. I would hope that a team would have a department of people going through the rules with a fine tooth come and asking all kinds of questions, just like they do with the technical regs.

I don't see any real loopholes when it comes to part etc. put as simply as possible you will pay for a part in the first reporting period they get used.

About the only way you could get cheeky would be if you produced stuff early (say before you handed out raises), or did it in such a way as to avoid overtime (not sure that's even a thing with f1 teams).

[Zynerji]

Having had time to dig through the financial rules that's not correct.

article 4.1 f

That reads that if they brought an updated chassis to both cars in the last race of 2022, and count it on 2022 budgets, at least the cost of the 2 single race-used chassis would not be counted in 2023. That can save like 1m off the top.

Gosh, you can see how messy this could be. ‘We made these extra wings that we didn’t use, it cost us £15 million…so that gets knocked off right?’. I’m exaggerating for effect, but one can see how doomed this cost cap idea is because all times will try and do something sneaky. Feel like we need to have some sort of confirmation soon from FIA about how much is actually being argued over here. The longer it goes on, the more it feels like there is something to hide.

I've described a system to use blockchain for exactly this type of arithmetic gymnastics, but the anti-web3 haters here pile on quick!

[littlebigcat]

I think 2021 regs would be relevant.

April 30th 2021 (Issue 5)
https://www.fia.com/sites/default/files ... -04-30.pdf

June 28th 2021 (Issue 6)
https://www.fia.com/sites/default/files ... -06-28.pdf

They still look the same to me!

Yep so this “they changed the rules” narrative that’s being passed around is easily demonstratively false. The reporting of this cost cop breach is showing up people who will just broadcast anything from anyone. Poor journalism indeed.

[littlebigcat]

Gosh, you can see how messy this could be. ‘We made these extra wings that we didn’t use, it cost us £15 million…so that gets knocked off right?’. I’m exaggerating for effect, but one can see how doomed this cost cap idea is because all times will try and do something sneaky. Feel like we need to have some sort of confirmation soon from FIA about how much is actually being argued over here. The longer it goes on, the more it feels like there is something to hide.

I’m not sure where the benefit would be. If they spent £15m to build some wings that they never used then they’ve wasted resources to build those wings. Sure they get the material and manufacturing cost back, but that’s resources that have been wasted instead of being used with something that will be used.

[SmallSoldier]

Hmm. The accountants agreed in 2020. There would have appeared to be no issue with the interim report, so RBR must have changed it’s reporting after 31/3/21. The teams wrote the rules with the FIA. Nine other teams managed just fine.

Or someone in the FIA decided to interpret the writing in their own way, based on pressure from Team Principal W. I do wonder why Sheila-Ann Rao's role changed mid-year at Mercedes from General Counsel to Special Advisor, all the while employed under Mercedes Petronas Formula One team. Perhaps a change in title to avoid cost caps? Who knows, maybe she was earning bonus off the books from Principal W as an x-mas gift or going away present.

You can spew all the conspiracy theories you want and try to deflect as much as possible… The reality is that only one Team exceeded the Budget Cap and that’s a fact.

[chrisc90]

[mendis]

[dans79]

Gosh, you can see how messy this could be. ‘We made these extra wings that we didn’t use, it cost us £15 million…so that gets knocked off right?’. I’m exaggerating for effect, but one can see how doomed this cost cap idea is because all times will try and do something sneaky. Feel like we need to have some sort of confirmation soon from FIA about how much is actually being argued over here. The longer it goes on, the more it feels like there is something to hide.

I’m not sure where the benefit would be. If they spent £15m to build some wings that they never used then they’ve wasted resources to build those wings. Sure they get the material and manufacturing cost back, but that’s resources that have been wasted instead of being used with something that will be used.

The other thing people seem to be overlooking is carryover is generally bad. When you make a part it's design is fixed. If you make it on Dec 31st. it will go on your 2023 budget, but will be at least ~2 months out of date by the time you can actually use. If you run it in the last race this season it with will be ~3.5 months out of date. I'm just considering construction time, in reality design and lead time in the factory will probably make parts even more out of date.

[mendis]

Motorsport Italia is predicting Horner to reveal the sum of breach in his press conference.

https://it.motorsport.com/f1/news/f1-ho ... /10386686/

[Big Tea]

Gosh, you can see how messy this could be. ‘We made these extra wings that we didn’t use, it cost us £15 million…so that gets knocked off right?’. I’m exaggerating for effect, but one can see how doomed this cost cap idea is because all times will try and do something sneaky. Feel like we need to have some sort of confirmation soon from FIA about how much is actually being argued over here. The longer it goes on, the more it feels like there is something to hide.

I’m not sure where the benefit would be. If they spent £15m to build some wings that they never used then they’ve wasted resources to build those wings. Sure they get the material and manufacturing cost back, but that’s resources that have been wasted instead of being used with something that will be used.

If they were different wing they may have had a choice at some venues and not decided which option they use until 'on the day', pos because it was wet or something. They may not even have decided which version to use but did not want to 'waste' the month lead time so made them side-by-side

[Stu]

At one of the earlier races this season I saw a report that AMG had done this, the wing was there, in the garage, but as it didn’t go on the car it doesn’t count towards the cap expenditure (I think that it was either Barcelona, Paul Ricard or Silverstone). It would surprise me if other teams were not doing the same; it seems strange state of affairs though, is development time for these unused parts logged, if so how?
I’m wondering if they have to put serial numbers on parts (otherwise this would be difficult to determine), I also wonder if part of the show/tell process was to keep abreast of updates/parts changes.