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Drab Cane
Carbenadium Industries
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Posted - 2010.03.17 02:07:00 -
[31]
"bump"
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- Who Dares, Wins
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Professor Leech
Transmetropolitan
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Posted - 2010.03.17 02:20:00 -
[32]
I trust that you have incorporated concepts from our earlier discussion of A = L + P and double entry. Especially double entry.
 Originally by: Crawe DeRaven
this thread is obviously going places
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.17 03:59:00 -
[33]
Originally by: Professor Leech
I trust that you have incorporated concepts from our earlier discussion of A = L + P and double entry. Especially double entry.
For the folks here, the Prof and I chatted a bit in the SC Lounge about this stuff.
I used the Net Asset Value (NAV) in my earlier post, because that seems to be a standard that has already been adopted among the MDers, and makes sense even to those who don't have an accounting background. For the debit/credit crowd, NAV is equivalent to the owner's equity (or the P in the Prof's accounting equation, A = L + P).
Double entry accounting is all fine and good, but (almost) no one wants to do that coding by hand, and I don't believe we have the tools to do automate such a thing for us.
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- Who Dares, Wins
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Professor Leech
Transmetropolitan
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Posted - 2010.03.17 04:25:00 -
[34]
This is a basic check that things aren't suspect or miscalculated as there is something wrong if A =/= L + P
Originally by: Crawe DeRaven
this thread is obviously going places
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.17 05:33:00 -
[35]
This would be absolutely true if the MD auditors were in fact reviewing a business's accounting, especially if they were reviewing periodic finanancial statements while the IPO is in operation, and when an IPO closes. They could review the recorded transactions, and then compare them with the actual assets on hand.
Unfortunately, we don't have an accounting tool that will allow us to do that. The current practice is for people to report their assets and liabilities via a NAV report. The assets can then be verified (and to some extent, the liabilities) by an auditor.
This is where asset valuation becomes important. Ideally, one or two pricing practices could become commonplace and 'generally accepted', to make it easier for auditors and IPO managers to come up with similar asset values.
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- Who Dares, Wins
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Randall Jackson
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Posted - 2010.03.18 02:32:00 -
[36]
Is NAV the be all, end all? Sure its easy to figure out and it gives some information but even if verified I tell you I have 20 bil in crap laying around space, does that give enough for you to decide I'm a good investment?
I've been trying to keep up with transactional double entry. Its not easy. Probably in violation of our coveted cost-benefit principal.
However, I think they'd be a way to take a snapshot at the end of a month (or whatever period you want to use) and present some useful information thats more robust then the amount of stuff I have. I've been thinking maybe the investee provides the auditor an API and the auditor would prepare something from the snapshot they see. This might be the most doable while increasing the information flow.
At the end of March, I'll publish the results of the (challenging) transactional accounting I've been trying.
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Professor Leech
Transmetropolitan
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Posted - 2010.03.18 02:48:00 -
[37]
Originally by: Randall Jackson
Is NAV the be all, end all? Sure its easy to figure out and it gives some information but even if verified I tell you I have 20 bil in crap laying around space, does that give enough for you to decide I'm a good investment?
/quote]
There are a lot of space auditors but are they able to pick up on critical auditing issues, such as isk flow problems.
Originally by: Crawe DeRaven
this thread is obviously going places
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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
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Posted - 2010.03.18 10:13:00 -
[38]
Quote:
Is NAV the be all, end all? Sure its easy to figure out and it gives some information but even if verified I tell you I have 20 bil in crap laying around space, does that give enough for you to decide I'm a good investment?
I don't recall the exact links by memory, but I think I made 3 audits where I made investors aware that:
- Audit 1 had collateral only reachable by low sec
- Audit 2 had part of the stuff in 0.0
- Audit 3 had assets in 0.0 or low sec as well and shown the approximate non hi sec value involved.
Where you get problems is in these 3 liners rushed audits that make it all in one soup.
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Auditing & consulting
When looking for investors, please read
http://tinyurl.com/n5ys4h + http://tinyurl.com/lrg4oz
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Charles Park
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Posted - 2010.03.18 10:57:00 -
[39]
I'm currently training as an account and as I go through my classes I've been thinking a lot about how the concepts I'm learning could be applied to eve to make the player driven market more interesting. On the one hand this is a game and we certainly don't want to turn it into 'work' but some basic financial tools in or out of the game would make the martket/financial side of the game much deeper and more interesting.
I don't know how things currently work with bonds/IPO's/auditing (new to MD and don't have time atm to read up on stuff) so I apologize if I'm re-covering old ground here but the core problem with all of this seems to be the ability to audit (verify) a corporations books. You can of course use a director's full access API key to get wallet information but this will give you all kinds of other info you probably don't want shared with the eve world (pos locations, etc). If CCP provided a way to query wallet/asset data for a corp without compromising other sensitive data (locations of poses, for example) a whole world of player driven solutions opens up. Given the proper tools players with the right knowledge could make a good 'living' 'doing the books' for other corporations, acting as their auditors, etc. Hell, if I could make enough money at it I'd gladly give up my invention business to become an e-accountant.
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Varo Jan
Caravanserai Consulting
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Posted - 2010.03.18 11:32:00 -
[40]
Originally by: Randall Jackson
Is NAV the be all, end all? Sure its easy to figure out and it gives some information but even if verified I tell you I have 20 bil in crap laying around space, does that give enough for you to decide I'm a good investment?
MD style NAV is just a starting point, a useful approximation and guide which is often sufficient for the purpose. It is possible to prepare a balance sheet, a profit and loss statement and a cash flow statement from the API - plus some manual input. The main issue lies in valuation of fixed assets and valuation of stock.
Re your hypothetical question - the answer is, it depends. If you¦re a region trader and your assets are lying around awaiting collection, and the resulting margins are good, and you have a good collection process in place, and, and, and... Or, if your high value assets are in 0.0 and you¦re a Rens trader with no ability to collect said assets, then...
In other words, use common sense when valuing assets, apply provisions as required, etc.
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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
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Posted - 2010.03.18 14:18:00 -
[41]
@Charles Park
No, what you talk about is a no-issue.
Getting privileges to check about stuff is easy (since investees have usually an alt as CEO. Most time they don't, the corp does not matter in the audit at all).
Knowing where a POS is:
- often needed, as (don't know about the other auditors, I talk for myself) evaluating a POS fitting is important.
- you can get the info with less than director rights
- you can get the info by just having a clue about how the EVE API calls containers and their locations.
And most of all...
- you can know where the POS is even without ever having an API of the guy. Just have to do like every people who live with that do (read: mercs, thieves...).
As for the NAV debate: NAV is often approximate. NAV does not exactly serve to count someone's butt hairs but to give a clear idea about his claims. IE a guy with 10B worth of assets in hi sec and 3B in 0.0 will start a bond for 5B in a different impact than a guy with 1B all in hi sec.
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Hel O'Ween
Men On A Mission
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Posted - 2010.03.19 11:30:00 -
[42]
Well, Randall, how about providing a sample template?
This way, MD could discuss/enhance a concrete example. I always find this approach easier, especially when dealing with people who discuss in a language which isn't their native language. They might have the same in mind, but using different terms. And hence "discussing" a non-issue, just because of a misunderstanding/misinterpretaion.
Selfish bonus point for me gained from an example: I'd be willing to enhance EWA's functionality so that it might be of better use for auditors/accountants. But I'm not an accountant, therefore I need input/guidance.
--
EVEWalletAware - an offline wallet manager |
Randall Jackson
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Posted - 2010.03.19 23:54:00 -
[43]
I fully agree that a template will be the best discussion charge for this idea. I was going to wait until the end of the month but I'll try a few more transactions tonight, account for them and get something posted up over the weekend.
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