EVE General Discussion

You earned an asset with value in isk. You did not earn isk

That value does not become isk until you exchange it for isk.

If I give you a painting worth 1million dollars, you got just that.
A painting worth a million. But I did not give you a million dollars.

Double check the post you are quoting. It has been corrected.

I misread the question, and have corrected the answer.

There are separate rules for collectibles....

BUT... if you gave me a car worth a million dollars I record 1 million dollars of revenue. I'm TAXED on 1 million dollars of revenue (this happens to people who win cars on game shows). When I sell that car, if it's less than a million dollars I record a loss (assuming I didn't depreciate it to get the loss sooner). If it's more than a million dollars I get a gain. But I have to record the million as revenue at the time I receive the gift.

Barter does in fact result in revenue. If I trade you a 10 million isk ship for a 100 million isk ship... I make 90 million of revenue at the time of the exchange. If I go and get the ship blown up I get a 100 million isk loss at the time of the loss (minus whatever insurance pays me of course). The fact that neither the trade nor the ship being destroyed resulted in actual money (again, aside from the insurance payout) doesn't change the fact that revenue was earned and then an expense was incurred.

Money is a separate function from profit. If I trade a matchbox car for a real car... I profited. It doesn't require the sale of the car in any way. I can drive that car until it dies and never receive a penny in actual money... but the profit is there and is easily recognizable.

Good, finally you are catching up.

Isk is isk.
The value of item x in isk, is not isk, until you exchange that item for isk.

If I give you a ship in EVE, it has a value in isk, and it cost you nothing to acquire.
You profited the value of that item in isk, and in the functions that ship can perform, at no cost.
You can fly it around all you want, or until it dies, but unless you sell it, you will not have profited one single measly isk from me giving it to you.

Look, I spent 4 years in business school, 7 years writing computer code for a manufacturing company (primarily in manufacturing, accounting, costing, payroll and tax areas) and 10 years writing code for a financial services company (loan generation, insurance, legal and tax areas).

Literally more than half my life has been dealing with this topic in the REAL WORLD. There probably isn't another eve related question that would be more in my wheel house than this one.

Simply put, you are wrong.

When an asset (ore/minerals) is received. It can be accounted for in one of two ways.

1. The asset gets recorded at the value you spent to acquire it.
2. The asset gets recorded at the fair market value.

If the asset cost nothing to acquire... it MUST be recorded at fair market value. There's literally no other option. Revenue must be recorded when it is earned.

You are viewing currency as a "thing". It's not. No currency is... not dollars, not pesos, not euros. They are all simply measurements of value that are constantly moving. The requirement for a business is to use that measure (be it isk or dollars) to correctly record their businesses profits or losses.

The currency in eve is isk.
When you mine... you get ore/minerals that have a value.
That value must be recorded as revenue.
The measurement of that revenue for eve is isk.

You simply are wrong about this in every particular. I'm not sure if you're just stubborn and don't want to admit that you were incorrect initially or if you really aren't capable of understanding what currency is and how it works. If you tried to run a real business in the manner you think an eve business should run you'd end up in prison. It doesn't matter how much you believe it to be so... you're simply wrong.

That is what you, as an accountant does.
Whereas the staff concerned with resource management record them as quantities of ore/minerals.
Whereas staff in executive positions decide what to do with them.

That you record a piece of acquired ore as revenue, according to its market value, that does not yet mean its value has been realized. Until it has been, its just a chunk of rock, no matter what your ledger says.

It furthermore does not change that if you fly out in a rookie ship, and point a laser at a rock, none of that costs you anything.
The ore you acquire is a rock with an isk value, but until you either sell it, or manufacture it further, its still just a rock.
Nor does it change that you gained that value, for FREE.

So in your ledger, you would record this as a gained asset x with value z, acquired at 0 cost.

None of which refutes what I have said, at any point.

Nor that minerals you mine yourself, are free and incur no cost, as well as having value on the market or in products manufactured from them, on the market.

Nor refutes that when you mine a rock, you get chunks of rock with a value in isk, but which themselves are not yet isk.
You dont make isk mining rocks. You make isk selling rocks, or selling what you manufacture from them.

Those codifications and definitions exist for purposes of taxing revenue, (or avoiding taxation) in as many ways as possible

No corp or NPC system in EVE taxes you for mining a rock.

You got your head so filled up with this nonsense you cant see the forest for the trees.

The revenue you describe, amounts to a pile of chunks of rock (albeit, valuable chunks of rocks).
But the value of that pile of chunks of rocks is only realized as actual fiscal revenue, once you sell them, or manufacture them into something else that is sold.

You can record the value of that asset as its market value, but that does not change that your revenue amounted to a valuable pile of rocks, (of which the value has not yet been realized yet as isk, and the value of which is ascribed as isk) at no cost, ergo it was free.

No disrespect intended for the following bolding, but I think it needs to be emphasized.

Ore has value because people that dont generate minerals, want it.
Currency has value because people that dont generate isk, want it.

A player in a drone ship killing NPCs, is generating isk, at no cost, for free.
They have no cost, beyond the initial cost of being capable of doing so.

A player in a mining ship shooting rocks, is generating ore, at no cost, for free.
They have no cost, beyond the initial cost of being capable of doing so.

Certainly the isk and the ore generated by either, is of value (by demand/supply), and interlinked to the value of the other.
But they are both infact generated for free, and at no cost. Just as they are harvested for free, and at no cost.

Cost is only incurred when someone tries to exchange one for the other, materials for isk, and vice versa.
That cost is determined by the supply/demand of both values, whether material or isk.

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Its important to recognize that EVE differs from IRL in many ways, as a virtual system.
This is especially true when it comes to how isk vs IRL currency is introduced or valued.
IRl, currency is a vastly complex system.
In EVE, its very simple.
If there was a different currency for each Empire faction, things might get interesting, but there isnt.
If systems got depleted and became devoid of mineral wealth, things might get interesting, but they dont.
EVE prints endless isk, and resupplies endless mineral sources.
There is no restriction on the introduction/depletion of either, except based on player activity.
Isk and minerals are thus also systemically "free", as well as practically, if you generate them yourself.

I happen to have a ratting ishtar. And I happen to be capable of mining ore. Can you explain to me, why I cannot rat and mine at the same time? Ratting income and mined ore is free beyond the initial cost of being able to rat/mine, right? So I should be able to get both, right?

But wait, no it isn't free. When I'm mining ore, then I'm not ratting. Meaning that it costs me the ratting income to mine ore. And when I'm ratting, then I'm not mining ore. Meaning that ratting costs me the mining income.

Do you understand it now? If not - congratulations, you win.

And on the topic of currency: Most people don't want currency for the sake of having currency. They only want currency, so they can exchange it for something useful. Currency is just a means to make barter trade between many people easy. You cannot eat it, you cannot build something out of it, you cannot use it to keep yourself warm during winter. (technically you can, but there are many things much better suited).

Where way way back one guy would have traded one good for another directly, provided he could find someone to trade with, now that we have currency he can trade his goods with anyone who wants them, and then buy whatever goods he needs from someone else. He does not trade his goods for currency. He still trades one good for another, the currency is just the roundabout route.

Until not too long ago, maybe 100 or 200 years you could have argued that currency had an inherent value of its own, because back then, most currencies were still backed by gold or silver. In the days of the ancient romans there was a coin called As - "pound". It was literally a pound of Copper - a very valuable material that could be used to make tools, fittings, weapons, all kinds of useful things. And a Sextanas was a sixth of a pound of copper. And this was a thing for many centuries. In recent centuries societies stopped carrying around their precious metals. They stored them in a bank somewhere and just traded the "deeds of ownership" known as banknotes. But nowadays, this is not the case anymore. Nowadays currencies are only worth the things you can buy with them. National banks keep printing new notes without having anything to back them up, thereby increasing the amount of money while the amount of goods that can be bought with them does not necessarily increase at the same rate. That is why we have inflation. If money had an inherent value, there could not be inflation.