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Tuesday, May 31, 2022

Accounting thoughts, Transformative potential and the third dimension

Every transactions or journals could be looked at from the glasses of transformative potential. For example you exchanged a chair for a table. A chair has transformative potential of $50, $50 could be transformed to 5 trays of Pizzas, so a chair has the transformative potential of $50 because the ownership of it could be expended / transformed into the ownership of 5 trays of Pizzas. 

Now a table could become 10 trays of pizza, so exchanging a chair and a table gives you $50 profit, which from the point of view of transformative potential means you got $50 extra in transformative potentials. 

So that's profit and loss... you could say that the shift from historical accounting to fair value accounting is objective because of this. Just because you bought an asset for $100 doesn't mean that currently the asset still has $100 worth of transformative potential, could be more could be less. 

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There are many directions to take from here but let's shift to another topic:

The first dimension of accounting is the debit side, the second is the credit side, and the third is something... let's call it the mehbit side. 

You could, probably fit in the transformation potential dimension in the mehbit side, or you're already good with p/l so no... ok. For me I'd put "Documentation" on the mehbit side.

Each debet - credit speaks existence of a source document, we could put the a dollar amount to that document in respect, and put that to the mehbit side. Every single transactions would increase the attributed dollar amounts not decrease, why? It supposed to work like history where data keeps on expanding instead of contracting. 

With this info we could check on the weight of documents of operations, a million dollar company might only had a 2 million dollars worth of documentation while a 500 thousand dollar company might worth 8 million dollars of documentations. 

Like the cash flow statement the types of documentations would be classified into different types. For example: internally generated and stakeholder based, so if you wanted to see only the stakeholder values you would be able to (internally generated provisions might be abusable/easy to manipulate). 

Now, documentations could be redundant so this is where things get "block-chainy"

Every correspondent transactions should be classified into a batch of documents, so instead of attributing the dollar amount to each documents/invoices/receipts, all of those documents would be grouped into the same batch because they speak of only one transaction. 

Miners could deserve rewards for removing redundancies from publicly available transactions, professional accountants who had access to private transactions would surely deserve appreciations for removing redundancies in the private situations.

The weight of the documents reflects the complexity of the nature of the company, the effectiveness/efficiency of the management, the network/relationships that the company's in (community contributions), ratio of the weight of documents with the transformative potentials, maybe good for tax purposes as well, if differenciated between positive/negative (relative to p/l) could be another confirmation for the accuracy of the whole accounting, what else?.

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In terms of transformative potentials you would want to classify the dimension of time. Sometimes it seems that a transaction brought you to a higher potential, but actually only for a short while. I mean you could tell just from the news, given ceteris paribus, the magnitude of one's potential at different points in time. 

So in the statement of transformative potentials you could arrange for the dimension of time as well. Definitely a tool to measure sustainability, but personally I like a targeted purpose for assets instead of going concern. But that's for another context.

Friday, May 6, 2022

This is depressing v.05

The expansion of the definition of negligence is depressing, say

The management was responsible for negligence if they let a slippery floor without warning or unattended. Ok... Should then the management still be responsible for not warning the people that the warning sign still was relevant even after it had been displayed since yesterday?

The government was responsible for negligence by not specifying whether the company's portion of insurance was a part or was not a part of fixed allowance included in minimum wage, alas the minimum wage payments were reduced for not only insurance but also tax gross ups. Should the government paid back everything that they had been accused of? Or the Government only should update the law? Or actually the law already works well and it's just a part of the grand scheme of things, without anyone noticing it...

Some artists were mad that their music containing samples of other musicians' tunes, were used without permission. They didn't specify that they had asked for the permission for the tunes though, so were they entitled for compensations by the user?

To what extent should you exercise duty of care? In the world of innuendos there were no lines, no boundaries, no limitations articulated.

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The lack of growth is subject to "Increase in entropy", 

"Increase in entropy" is subject to future collapse

Reliance in foundations bound to collapse leads to depression.

Mass reliance in collapsing assets would be massively depressing.

So instead of some instant, immidiate "care" that paid no attention to the underlying nature of the problems, we should expand our fortification against depression early, by setting up clear expectations of one's rights and responsibilities.

Monday, May 2, 2022

Is it Taboo? v.07

I often see parents love their children so much they give access to their children to all kinds of things that they could afford at maximum. I'm not a psychologist nor I'm a parent, as someone who is just an enthusiast on many different things like accounting, business, psychology, art, etc... I conclude based on the materials I've observed that this way is better:

Parents are responsible for the life of their children, they must always make sure that the children is not depressed for the rest of their lives (by depressed I mean the person helplessly kept on wanting to die). The parents are the one who's responsible for that other than the child himself/herself. 

Providing just enough is better. If the kids wanted more, they had to "buy" it from their parents or their uncles/aunts or other people. However some people outside offered dangerous materials, obviously it's risky but all families would have or should have their own way of facing this. 

Coming from this, kids should have had the better kit in facing the reality of the outside world. Moreover having "just enough" is not really that bad actually, it could be interesting.

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There's utility in me spelling this out... the end logic of this is, or one end of the logic of this is: If the child did well in life, the parents would've contributed positively (mainly intellectually and/or philosophically) to the child. If he/she didn't, the parents would still be responsible parents, but contributed not more than that. This is relieving for the child because if he/she chose to live modestly, he/she wouldn't be living in "debt", supposedly.

There's nothing wrong with living modestly as long as you contributed positively instead of negatively. 

Now, even if your parents gave you everything and you didn't gave a lot of currency worth back, it's still contractually or personally ok given that that's the way it were in your family. The reality is, still, people estimated their own contributions highly. 

The society also often judgemental while not being careful about their judgements

-_- v.02f

Let's say for an extreme example, there were a parent couple who gave their daughters "everything" and then they kind of expected that their daughter would not criticize them, gave them whatever they asked, and obeyed them all the time, and revered to them on top of that. 

Then they said my daughter is not living up to her potential, kind of indirectly ungrateful, secretly disrespectful, etc. 

Well to me, judging only from this simple point of view, this is to be expected because they weren't giving their daughter "everything", "everything" was a debt. She had little to none to own, and then little to none to offer. 

The feeling of inadequacy and poor quality out of their daughter came from the lack of quality of property she has, and she couldn't offer them a decent quality "services" or even "products". 

So the solution is you got to give people property, you just have to. The wisdom of the infrastructures that we are living on top of, democracy and capitalism, were not without reason. 

If she turned out to be an asshole, or even a psychopath/sociopath then that's lifetime worth of information. If she's a grateful child then it's genuine, and it's something to truly celebrate in perpetuity. Why would anyone rob themselves and their child out of that opportunity? Why not that compared to rationalizing that "Oh I should be grateful that she is not a suicide bomber" or something, or forcing one's self to "accept" it in whatever form it was? Be genuinely content with your life

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If I had an asshole kid, I'd probably tell him something like:

"Son, let's talk for a bit. This is about me, but also about you and everybody else in general. You always disrespectful towards your teachers, people who are working, at me... son this is not a good idea. What's good is for everybody to not do business with you, cause you're not being a good business"

Ok I'm suck at it maybe, but probably that delivers the point.

And after that you slap them, and hang them upside down in your basement... (joking)

The point is, what he owns he owns and he should be able to do whatever with it without me making it difficult for him owning what he owns. 

When reputation was measured in more rich manners

Reputation has a spectrum, it could come from achievements, popular presentation of one's self, being audited or scrutinized, being on a...