The Reason I made this Channel (Space Accounting)

The reason I made this channel was to talk about… Space Accounting! I always have fun talking about this subject!

VIDEO SUMMARY

The reason I started this YouTube channel was to talk about Space Accounting. And when I say space accounting, I am talking about how we are going to do accounting when humanity is regularly traveling, working, and playing in space. Now let me give you some background. A little over a year ago, I developed a financial equation called the Theory of Credit Markets. And I was so excited about this equation, that I wanted share it with all of you. I think this equation is so important and deals with the very fundamentals of how accounting works. I ended up writing a book about this called “On Wolves And Finance” which you can get on amazon. I made another YouTube video that gives a good synopsis of my book, so I’ll link that for you in the description here. So if you haven’t got a copy, what are you waiting for? Go get one and check it out here.

Now there are a lot of different applications for this financial equation which I talk about in my book. But the aspect I spend the most time researching is “Space Accounting.” When we start thinking about space accounting, there is a theoretical problem that no one is talking about. So here is the problem: Imagine you have a fleet of space ships flying around the galaxy. Now imagine you have some sort of business operating on those spaceships. Let’s say it’s a cleaning business. Now we know from Einstein’s theory of relativity, that an object in motion experiences warping in space and time. The point of relativity is that space and time are relative. But this presents a problem for business. Your cleaning crews are generating a certain amount of productivity (or sq ft cleaned per hour) which you are charging for. But each sq ft and each hour are warping, depending on the speed and direction of the space ship. So why is this a problem? Because we as accountants have to generate a quarterly financial report, and you can’t roll up a financial statement from all your space ships when space and time are relative. We have never experienced this problem before, because all businesses currently operate on the surface of the planet earth which is rotating at the same speed.

Now at this point you might say, “Zach, what are you talking about? This is so far away. Who cares?” And I will say, “this is really not that far away.” We have to solve this theoretical problem. People are talking about going to Mars in the not too distant future. We are talking about putting people on a spaceship and traveling for six months to get to Mars. Now let’s put our business hats on. What is the problem here? No one is going to want to get on a space ship for six months unless there is a McDonald’s on board. I mean, let’s be real here. People need to eat. And people like hamburgers. And if you don’t like McDonald’s you can substitute a different business onboard. But my point is we are going to need businesses to make this trip. Business is an important part of the story of making space travel possible. Okay, so let’s say we put a McDonald’s onboard. Now we have created a problem.

McDonald’s is traded on the New York stock exchange. Which means they are required to publish financial reports every quarter. How are they going to roll up their financial statements when one of their restaurants is experiencing warping in space and time relative to all the other restaurants on the surface of the planet earth. That is not the only problem. How are they going to perform a financial audit on this restaurant that is flying through space?

So you can easily start to see how our entire accounting systems and capital markets start to break down. So the solution I propose is to apply Einstein’s theory of relativity to the process of generating financial statements.

This is so important. It is a fundamental shift in how we do accounting, and we as accountants don’t have much time to figure this out. It is crazy to me that the SEC isn’t starting to worry about how they are going to deal with space accounting. It is also crazy to me that the big 4 accounting firms haven’t started space accounting departments. Accountants have a really critical role to play in the future exploration of space.

Leave a comment down below letting me know what you think! If you find these videos helpful, please subscribe to my YouTube channel.

Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.