search

C4Coin / automated-legal-entity

This is a repository for the creation of an Automated Legal Entity (ALE)
Other
0 stars 4 forks source link

What are the inputs and outputs of Accounting Protocols? #5

Open dylanpenn opened 7 years ago

dylanpenn commented 7 years ago

Work on the topic here. It will later be added to the Code section.

harrisonperl commented 7 years ago

An obvious (potentially best) implementation would be to try to create an algorithmic version of US GAAP. Considering this feat has never been done, this comment will suggest a constrained version of a managerial accounting system for C4Coin.

Inputs: -Revenue -Cost of Sales? -Fixed Costs

Outputs: Operating Profit? Free Cash Flow

These are some of the high level figures useful in determining income tax liability and operability of the company.

In C4Coin's case, revenue is in the form of transaction fees earned on the sale of C4Coin tokens. Since there is some market value to the transaction, C4Coin can record the USD value of its transaction fee receipts immediately. Furthermore, almost all expenses may be in the form of fixed costs. Said differently, there may be little to no marginal cost of sales. Hence, operating profit and cost of sales may not be necessary in this implementation.