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Comment by chii | Hacker News Reader

> you know for sure payment is coming soon

and there-in lies the catch - you cannot know for sure something that hasn't happened yet. There can not be accounting practises that count money that has yet to be received on hand.

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Yes, there is a thing that almost guarantees things in the future will materialize, it’s called a contract. People and businesses have been dealing in futures for centuries. For instance, Italian banks have special vaults for Parmigiano Reggiano taken as collateral. If some of their customers didn’t have access to these tools they probably would’ve gone out of business long ago, and we’d all have lost access to great cheese.

They’re just tools, as such expected to be held the wrong way by some people.

PS: I had a lot of fun developing an accounting system for a client that needed to solve exactly this problem :)

There actually is. Accounting is complicated because it has a multitude of rules around all this stuff.

The goal is transparency. Yes, if someone owes you money it’s an asset on your books. But there are a ton of rules around proof that you expect to be paid, when it must be paid by, when you need to write off all of it or some of it.

There can be and often are, because it's important to account for future expected flows - credit that's been extended and is due to be repaid, for instance, has to be accounted for. The thing is, these flows should be clearly and cleanly separated from actual cash on hand.

Would you say the same thing about debt? Just leave it out of the books, because the repayments haven't happened yet?

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