Beyond Depreciation: Accountable Methods

What is the difference in formulations for accounting forward and for accounting in the past. I understand accounting techniques can be dynamic, like Accounts Receivables. But if you identify what the difference is between the formulæ, by default, everything else is held constant...maybe chaos theory constant but we can intuit the majority-this is micro accounting over the long term. It is the differences that may always hold constant...? Those things we think need quantifying! Can't it be sufficient to say they are always changing? Too much talk about if a derivative is positive or negative. Can we quantum count and say it's both or -/+ while still tuning into that frequency?

Abstract but specific: Spending money today on something that grows into a huge revenue cycle seems marginally profitable (although those margins could be huge), it could also require reinvestment and additional investments to continue the possibility that it would be a larger and larger return. Another way to consider the investment is to depreciate or expense the "investment". But where does that leave you? Again with a lot of expenses...requiring a lot of revenue. There must be something I'm missing in this game of profit and loss. It just doesn't seem interesting alone.

So how, if possible, can we afford to evaluate a small investment from the beginning? It seems that the plan or formula for accounting could be arranged to be profitable with out requiring a large earning to expense ration / ratio?

Out of the shadows you answers. Ready for a Sun Day.

Sun, Jul 26, 2009  Permanent link

RSS for this post