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Salary and benefits aren’t treated exactly the same as capital expenditures. That’s how your purchase of a ten thousand dollar piece of electronics becomes a th

Salary and benefits aren’t treated exactly the same as capital expenditures. That’s how your purchase of a ten thousand dollar piece of electronics becomes a thousand dollar charge every ten years, no matter when the check clears. Which looks better on your companies balance sheet? Have you ever tracked your time as a salaried software developer? I used to, and used to think it was a stupid exercise. Then I learned that my payroll costs were being capitalized against the project in development. Two years later when the project launched, it hit the books and started deprecating over seven years. That meant my company essentially had two years where my salary wasn’t on their books; when it hit, those two years were skewed over seven. Have you ever had to differentiate between tracking time spent doing development and time doing support? Support is an ongoing operational expense that can’t be capitalized. Same pot of money, vastly different ways to split it up.

TurkTurkleton 7y ago
I am a salaried software developer, and my employer requires me to track my time, for precisely the reason you describe. And I still think it's stupid, despite having heard this very explanation at least twice (or thrice, if you count your comment). It doesn't make it make any more sense; it just makes corporate accounting sound like so much smoke and mirrors that accountants and investors willfully participate in. Maybe I'm focusing too much on the fact that those dollars are coming out of their bank account into mine every two weeks like clockwork regardless of the fact that they're pretending that they're trickling two years' worth of salary out to me slowly over a period of seven years or whatever, but it just seems so arbitrary and nonsensical to pretend that they're not spending that money to pay me right now.
- owenmarshall 7y ago
  > those dollars are coming out of their bank account into mine every two weeks like clockwork Would it make you feel better to consider that those dollars aren't really coming from their bank account in any meaningful sense? They're almost always from a large creditor who extended a line of credit, or from the sale of unsecured debt against the company if you're big and bad enough. And that their "bank account" is almost entirely divorced from cash on hand, and it's built up from money other businesses and customers owe them for services? We assume that businesses are going to be in business for the foreseeable future, that they'll pay their debts and collect profit on their assets and the world keeps moving. In that sense, corporate accounting isn't the smoke and mirrors; it's the way we give that assumption some basis in reality. We assume that your business will stay in operation and sell the product you helped build, so why penalize them for not being able to get money before the asset is built?
  - TurkTurkleton 7y ago
    Ah, yes. I always forget that the entire global economy is built on debt. That actually makes it worse, in a way, but at least it makes sense in context.

TurkTurkleton 7y ago

I am a salaried software developer, and my employer requires me to track my time, for precisely the reason you describe. And I still think it's stupid, despite having heard this very explanation at least twice (or thrice, if you count your comment). It doesn't make it make any more sense; it just makes corporate accounting sound like so much smoke and mirrors that accountants and investors willfully participate in. Maybe I'm focusing too much on the fact that those dollars are coming out of their bank account into mine every two weeks like clockwork regardless of the fact that they're pretending that they're trickling two years' worth of salary out to me slowly over a period of seven years or whatever, but it just seems so arbitrary and nonsensical to pretend that they're not spending that money to pay me right now.

owenmarshall 7y ago
> those dollars are coming out of their bank account into mine every two weeks like clockwork Would it make you feel better to consider that those dollars aren't really coming from their bank account in any meaningful sense? They're almost always from a large creditor who extended a line of credit, or from the sale of unsecured debt against the company if you're big and bad enough. And that their "bank account" is almost entirely divorced from cash on hand, and it's built up from money other businesses and customers owe them for services? We assume that businesses are going to be in business for the foreseeable future, that they'll pay their debts and collect profit on their assets and the world keeps moving. In that sense, corporate accounting isn't the smoke and mirrors; it's the way we give that assumption some basis in reality. We assume that your business will stay in operation and sell the product you helped build, so why penalize them for not being able to get money before the asset is built?
- TurkTurkleton 7y ago
  Ah, yes. I always forget that the entire global economy is built on debt. That actually makes it worse, in a way, but at least it makes sense in context.