Accounting for direct sales between order and arrival

I see 2 other topics on this but both are now locked. It has also been discussed this round but I can’t find it. It is currently highlighted most effectively in the large lump of an order of Shiney Things on jobsons.

Issue
Player a places a direct sale order on player b lets say 50 million gc and player b accepts.
Accounting
Player b gets a 2 sided entry - the asset being receivables and the liability being the cars that he still needs to ship. All good! and when player b ships, his liabilities go down and equity goes up as it should.

The problem comes with player a who gets a liability - payables but no matching asset - hence his equity goes into negative by 50 million.

Once gameplay is established this generally gets hidden in the noise and eventually corrects itself, but that doesn’t make it right.

The correct accounting would be either not to recognise the liability until shipping takes place and then to offset that with a stock in transit asset, or to keep the potential liability and offset it with a potential asset - stock ordered.

Thank you for this post Fireyscorp, our Dev Team will look into this right away.

POSTED

Hey Fireyscorp, could you confirm for me that in your player A & B scenario, player A is a retailer?

Yes Player A is a retailer

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Firey, you are certainly right that accounting should never be out of balance like that, so we are looking into this now. That’s a really good catch and you articulated the problem well … most students studying accounting in university would not have been able to do that. I’m curious if you have an accounting background or experience?

LOL. Not accounting but experienced. I’ve run my own business for over 20 years and I’m a solid investor so read annual reports a lot.

FIREY … running a real business and having investing experience certainly helps with our game. We have been looking into the issue you raise above, can you tell us which report you used to catch this issue? For example, was it the GENERAL JOURNAL where you found the 50 million transaction out of balance? Or what it the BALANCE SHEET? Or something else?

The reason we ask is that the GENERAL JOURNAL will frequently be out of sync for the current day GT because some transactions do not get posted until the end of day GT. The BALANCE SHEET however should ALWAYS be in balance because it is designed to only show up to the PREVIOUS day GT (not the current day, because it would be out of balance).

Actually the thing that caught my eye was the Financial summary on the website of Shiney Things
https://play.goventureworld.com/Website/Index/SHINEY%20THINGS

As the numbers are so large it can be directly compared to the similar report in Jobsons website plus the leader boards for Revenue.

Also you may recall I had a similar problem when accepting an order for 150k cars (instead of 150) before the reset and that resulted in the same problem - my revenue and liability went through the roof and Cesci went insolvent theoretically. (I also go taxed on the revenue I could never earn)

Thanks Firey … we have now found the problem and have a plan for correcting it. We are fixing this along with the new feature for cancelling orders.