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It's not debt, there is no interest. It's just a liability. No different to Amazon taking a pre-order on an upcoming book. Judging how many largish kickstarter
by steve19 11y ago
It's not debt, there is no interest. It's just a liability. No different to Amazon taking a pre-order on an upcoming book.
Judging how many largish kickstarters end in disaster, I am not surprised the people running them don't use accountants.
- Johnny555 11y agoThe interest rate doesn't determine whether or not something is debt - I have a 0% interest car loan, yet it's still considered debt. Kickstarter funds are a loan for a finite time that's paid back in product. And if the product costs more to produce than estimated, that cost overrun is the cost of the debt - i.e. interest.
- steve19 11y agoDebt is the state of owing money. This is the definition of debt. Kickstarters do not owe anyone money.
- Johnny555 11y agoDebt isn't necessarily paid in money, depending on the terms of the contract, debt could be paid in cash, labor, gold, corn, oil, hogs, or pretty much any commodity that can have a value set on it. In this case, Kickstarter funders expect to be paid in product (or whatever perk was promised to them).