Monthly Financial Report - September 2005

Last month the financial reports were looking much better, except for the problem of the slipping value of the Linden$ compared to the US$. This month they look even better.

The RA yesterday passed a resolution affecting the way we present our financial information. Starting now, both the Balance Sheet and the Income/Expense report will be provided in both Linden$s and in US$s. Here are the URL's. These links are also available on the Neualtenburg site.


Neualtenburg Balance Sheet in Lindens
http://www.tospitimou.com/Neualtenburg/BalanceSheet.pdf

Neualtenburg Balance Sheet in US Dollars
http://www.tospitimou.com/Neualtenburg/BalanceSheetUSD.pdf

Neualtenburg Income/Expense Report in Lindens
http://www.tospitimou.com/Neualtenburg/IncomeExpense.pdf

Neualtenburg Income/Expense Report in US Dollars
http://www.tospitimou.com/Neualtenburg/IncomeExpenseUSD.pdf


Because of discussion and the impetus to pass this resolution in the RA, my impression is that everyone will be happier if the discussion about these reports is expressed in US$s. Please express yourself if you feel otherwise. Maintaining dual currency information is a challenge, so we should at least arrive at a consensus as to which currency will be our basis of communication. However, both will continue to be published.


We've reached a major milestone. For the first time, the income of Neualtenburg has exceeded the expenses. We are no longer losing money. And, all signs indicate that this trend will continue.

Using both US dollar versions of the reports, have a look first at the Balance Sheet. Remember, the Balance Sheet shows how much we own minus how much we owe. What we own minus what we owe. Subtract those two, and you get what we're worth. This month, that number is -$433.64. Its labeled "Total Equity", and since the founding of Neualtenburg, its always been a negative number. The great news this month is that, for the first time, its *LESS* negative than it was last month!

Being negative means that we owe more than we own. From my point of view, the first big goal that we have, financially, is to own more than we owe. What we did last month is take the first step to that. From the bottom of the Income/Expense Report, you can see that we made $29.40 last month. Thats exactly the improvement in the "Total Equity" number. It's $29.40 better than it was last month. (Little hard to tell, cause last month we were talking in Linden$s.) As month after month goes by, and we continue to "make money" on the Income/Expense Report, slowly we'll climb back up to being a City with *real*, financial statement value.

So, number one, we finally broke even. With new members still coming in, everything suggests that this will continue.

Another milestone. We've now recovered the US$980 that we spent to purchase the island from Linden Labs. This section of the Balance Sheet I've simplified a bit from how its usually done. You can see near the top, under Fixed Assets, that there's a new account "Realized Gain on Land Sales". What this means is that the "Land Sold" in the two previous accounts exceeds the "Land Purchased from Lindens" in the account before that. Since our land is not worth less than zero, the additional amounts that we make now from land sales become real revenue, no longer "paying back" for the land we bought from the Lindens. Its a real milestone.

At this rate, we'll be able to publish a budget in another month or so. Thats amazing. A budget can only happen if there is predictable income and expenses from month to month. We're getting very close to that.

One small "accountant's horror" which I am duty bound to point out to you. The Balance Sheet is "out of balance". This is an absolute disaster thing in the accountants world, and cause for emergency corrections. Unfortunately, there's not much I can do about it. It will get corrected after January first.

For those interested, the cause of the imbalance is the dual currency accounting, combined with the fact that I'm using software that is not as rigorous as it should be. That's what I get for US$35.00. When the GOM account was shut down, both of the accounts related to it were cleared, all money transfered out, and the accounts zeroed. Because the US$ account was "foreign currency", some glitch in the software enabled a valuation difference of 1228L$ to sneak into how much that account contained. And, unfortunately, because of safeguards built into the software to prevent just this sort of thing from happening, its impossible to correct.

I'll correct it on January 1, by re-establishing the books, and manually re-loading all the balances. But, it is a major headache. A Balance Sheet "out of balance"!! Horrors.

That's it. As usual, please contact me if you've got any question at all, or post them here. I'll try as best I can to answer.


Sudane

That's great news Sudane! Thanks for being so smart and diligent about this!

BTW, if you want a good free PDF generator that doesn't affect output (no watermarks or advertising) try PDF995 at http://www.pdf995.com/download.html.

Egads.

Understandable, and at least the error is not large at this time, but I recall dimly my college attempts at accounting and feel for you.

Hehe... I have 995, actually for much longer than this one. Can't remember why I like this better; could be that unless you buy it, 995 takes you to its website everytime you print a copy (or at least it used to). Oh well, can't get something for nothing .

Thanks!


Sudane

Yay! Celebration time. We're definitely having a party!

Who pays?

Mel