EVE General Discussion

Well, this turned into quite the threadnaught.

"Never attribute to malice that which is adequately explained by stupidity."

I admire your dedication to explain things to others but at some point you have to realise that there are simply a lot of stupid people in this game, some even breathtakingly so. If they didn't understand what you're saying after the 3rd time, they won't understand it after the 10th time either.

If you mine the minerals yourself, you incur no cost.
If you use those minerals in manufacture, yes, they are consumed.
But you then get a product which includes the value of those minerals in its market value.

If you SELL a product for less than the cost of ALL the materials required, ofc you are making a real loss.

You are confusing the fact that self-mined minerals are free, with the fact they have market value.
These are not at odds, or contradictory.

Nobody, certainly not me, has argued that one can consider the VALUE of self-mined minerals to be 0, either when sold or used in manufacture, even if the cost of acquiring them was 0 isk.

That is not in dispute.

The point is, quite simply, that if you mine your minerals yourself, you dont have to expend any isk for them.
Just point laser at rock, and voila, ore hold fills with minerals that cost you not a single isk.
They are free, to you.

I specifically said that if you spend 100mil in assets, to turn out a 90mil asset, that is not only stupid, but a loss in value.

You didnt understand that the first part of that quote is to point out, that production itself doesnt care about the value of the materials, it only cares about quantities of materials.

When I said "you didnt sustain a loss", I was referring to the fact that inorder to produce item x, you must expend mineral x in y amounts. You dont sustain a loss of the materials in the manufacture process, you get a product that incorporates them.

The value of those materials and manufactured product, does not change the above.

Well, looks like you finally understand what people have been trying to explain to you for about five pages now, but you're still quibbling over wording in an effort to appear right.

So, once again with feeling this time.

In accounting or economic terms if you turn 100m worth of materials into 90m worth of product you have sustained a net loss on the production. It doesn't matter if you paid for the minerals or mined them, you've still sustained a loss. You can claim you meant whatever you like, but you've still spent five pages arguing out of a dictionary (and a bad one at that) when one page out of an econ textbook would have shown you how silly you were being.

A loss is a loss, stop nit picking trying to tease out a definition that either doesn't apply or doesn't exist.

No, Ive understood it all along and to begin with.
Its you that is still catching up and trying twist what I have been saying all along, as if I hadnt said exactly the same consistently.



I addressed this specifically in my previous post to you.
Go back and re-read it, intently. You are trying to construe things into it, that are not there.

Look... in the business world there is no such thing as "free". If you get an asset in you either have an expenditure (what you spent to by the asset) or you record revenue (marked at the asset's fair market value).

If you get something for nothing (assuming it will be used by your business)... it's revenue.

If minerals are free... then you made isk. The amount you made is the fair market value of the minerals. You realize the profit at the time you mine. Using those assets becomes an expense to your manufacturing.

Nothing about your "they're free" argument changes the fact that the market value of the minerals you use is a COST to the manufacturing process you are using those materials in. You realized profit when you mined the materials. They become an expense when you use them.

Come on. You should be able to get this. I figured this out before I even went to business school... this is 8th grade stuff.

And if you wanted to be most correct, the value you'd have on your books for the cost would be the fair market value at the time you bought the materials. Depending on if you use LIFO or FIFO (Last in first out, first in first out) this can have a drastic impact on your profit.

Example. You mine 1 billion units of Trit a year for 10 years and use none of it. In year 1, trit was 10 isk per unit. Each year it dropped 1 isk per unit. By the end of the 10 years you have 10 billion units of Trit valued at 55 billion isk.

If you need to use a billion isk to manufacture a product and were using LIFO accounting... your expense would be 1 billion isk.

If you were using FIFO it would be 10 billion isk.

Or (hopefully) you would have written off a 45 billion isk loss due to the (effective) depreciation of your asset. But regardless... a loss is either coming as you use your Trit, or already realized. But regardless the loss is there because your Trit lost its value.

Again... this is the reality of how business works. You account for your money in order to actually show what's really happening. What really happens in eve is that when you mine stuff you get revenue as soon as you get the asset. And you incur and expense when you use it. If you hoard the asset and it goes down in value... you get a loss. If it increases in value you get profit.

You are confusing the value of something, with the cost of acquiring it.

When you receive a free asset, ofc you record it at its market value, and as revenue.
But you do NOT record ANY cost associated with acquiring it, as there is NONE.
Ergo, it was FREE.



When you mine a mineral, you don't "make" any isk.

You simply make an asset that has a market value.

Yes... you do.

You acquire an asset with a value. To offset the increase in your assets you either have to record an expenditure or record revenue.

Accounting 101.