.Here are the links for the reports. May I ask one of the website team to add these links onto a financial page? For a non-profit entity like ourselves, this should be completely accessible information.
Neualtenburg Balance Sheet in Lindens
http://www.tospitimou.com/Neualtenburg/BalanceSheetLD.pdf
Neualtenburg Balance Sheet in US Dollars
http://www.tospitimou.com/Neualtenburg/BalanceSheet.pdf
Neualtenburg Income/Expense Report in Lindens
http://www.tospitimou.com/Neualtenburg/IncomeExpenseLD.pdf
Neualtenburg Income/Expense Report in US Dollars
http://www.tospitimou.com/Neualtenburg/IncomeExpense.pdf
My comments are, as usual, about the US dollar reports. Someday, perhaps, we'll transition to thinking about our finances in our *own* currency. But for now, the consensus seems to be that considering them in USD$ seems more "real".
Income was good, again, in January. Monthly fees were $242 (in part because a number of people have paid some in advance, and I have decided to simply call them current income. They *should* be entered as "future" income, but I was spending too much time managing monthly advances, so i stopped. This is one important reason for the development of "personal accounts"
.And land sales income was $33. So, along with some miscellaneous of about $10, together we had a healthy income of $285.
The expenses were entirely the Linden monthly fee plus the reelatively small conversion charges. For those folks who are paying attention, there's a curious anomaly on that. The Linden fee shows as $193.62; but we all know that in fact it is $195. What's that about?
Ahhhh... let me just say: accounting with dual currencies is truly a challenge
. See if you can follow this. Approaching the payment date, there was insufficient money in the Paypal account to cover the fee. So I sold L$ on Lindex to convert some of our Treasurer L$ to US$. There would be additional fees for moving those to the Paypal account, but there was no need, since LL will take the monthly fee first from the avatar US$ account, and then the remainder from the Paypal account.So, although all the funds paid to the Lindens were in US$, some came from Paypal and some from L$ converted to US$ in Rudeen's account. But, thats not the end of it.
That entire transaction shows up in our books in L$, since L$ is the currency of the city. The indiviidual accounts, separately, are denominated in US$ (their "intrinsic" currency), but when they appear on a Income Report, they are in L$, using the current "sell" rate for that day (I feel the L$ "sell" rate is far more significant than the "buy" rate). So, that was back on Jan 21.
Since that time, the L$ value has changed, there is a different "sell" rate. So when these reports were generated, the translation rate from L$ to US$ was different than it had been on Jan 21, and the payment to the Lindens changed in value.
Very frustrating for a true accountant, which thank god I'm not. They would have all those variations recorded in the "Currency Gain/Loss" account.
Despite all this zoo-iness, please understand that, moving to the Balance Sheet, the amounts shown in the Bank Accounts (City Avatar, Treasurer Avatar and Paypal account) are indeed what are there. My main "end-of-the-month" job is recording what each of those accounts hold and adjusting the income and expenses to make sure they are accurate.
As I said many times before, the Balance Sheet shows what we *own* (the Assets) minus what we *owe* (the Liabilities) to understand what we're *worth* (the Equity, also known as "Net Worth"
.Current Assets, for us, are cash. You can see that we have $559. Fixed assets are land and buildings, and there you can see we have $53. The $53 is comprised entirely of our one/half payment for the Rathhaus. Another L$15,000 is owed to Kendra for this. So, the total of what we "own" is $612.
This brings up an interesting point about the Balance Sheet, very confusing to many. The payment for the Rathhaus was made in January, but it did not show up as an expense. Why was that?
Expenses are money which goes out and is used up. The monthly fee is an expense because what we get for it only lasts a month. The Paypal fees are expenses because they are paid in order to get an immediate service. They relate only to the immediate event.
A building, on the other hand, (and land is exactly the same), stays there. We buy it once, but we get the use of it for years and years (unless it was build with shoddy materials
). So, it has enduring value, in fact, we say that we "own" it. So, instead of showing the Rathhaus as an expense, accountants consider it an "investment", and the costs of investments do not appear on an Income Expense report. They simply change how the Balance Sheet looks. Before, we had more cash and no building. Now, we have less cash AND a building.On the Liabilities side (what we *owe*), the only thing that appears are our loans from two residents. Discussion is underway to pay these back, or in other fashion remove them from our list of loans, since we clearly have enough money to repay them.
So, bottom line. Helped by the $81 "profit" from the Income Expense report, Neualtenburg now has a Net Worth of $383. Each month that we show a profit, this number goes up.
Let me just express how important this number is... $383. It truly is the "worth" of the City. If someone were to come along and wish to invest in the city (by buying bonds OR by lending money), that person would know, with no doubts, that the City was in a position to repay $383 of that loan. That's an oversimplification, of course. But it is a fundamental concept in the world of money as we talk about loans, expansion, and such, to know what our real "book" net worth is.
Thats it for my regular monthly report. But, following this, I've added some more esoteric notes brought up by one of Frank Lardner's comments. Read on only if really are comfortable with Balance Sheet matters.
In a post several months ago, made as a general analysis of the Neualtenburg project, Frank made the point that existing land held by the Raumnutzung did not appear as an Asset on the Balance Sheet. Frank offered this note as a comment, with no judgment conveyed one way or the other. But it caused me to think about that.
Any land held by the City, the Raumnutzung (suggesting Land Management Group), is in fact an asset of the City. It *should* appear on the Balance Sheet; indeed, if it did, the Net Worth of the City might show as considerably more. The problem is, in the context of Second Life real estate, how to get it there.
Land, in fact, does appear on the Balance Sheet, but it appears as entirely sold. Land first appeared there at the moment that Neualtenburg emerged out of the digital void, when the City's cash went to the Lindens in exchange for land. At that moment, land worth $980 appeared on the Balance Sheet (sims were cheaper then). After that moment, though, residents arrived and starting buying land from the City. This lowered the paid dollar value of what was left, down to the point of zero. When we achieved land sales equal to $980, the land investment was entirely repaid.
But, we still had/have land. As current land is sold, its converted to simple income through an account called "Realized Gain on Land Sales". This is perfectly legitimate. But it passes by the fact that the City does indeed hold real and valuable stocks of land, and the dollar value of those stocks of land is not properly shown on our statements.
The answer is undoubtedly some vaulation on the stocks of "protected" land, other valuations on "never sold" land, and then (most difficult of all) some reflection of future income for "abandoned" land (which is in fact a liability). All of this is very "sticky" in the sense that none of it is simple dollars; everything is "ajudged value". On top of which, of course, is the fact that this is SL
.Reflections on this matter are welcomed and appreciated. Let me say again, as I have in the past, that the formation of a Finance Committee would be very much welcomed.
Sudane
