3 ms·
It sounds complicated, but it's actually very simple. Each of those stages is a saleable product, and you can cash out at any time by selling it to someone who
by whatshisface 4y ago
It sounds complicated, but it's actually very simple. Each of those stages is a saleable product, and you can cash out at any time by selling it to someone who works on the next step in the chain. It's just like selling bonds before their maturity, and it works according to the same NPV calculus.
- credit_guy 4y agoSure, it is a saleable asset. But you find the price only when you actually sell. You can estimate in principle how much your oil fields are worth, but that does not go into your accounting books, just like if you are a landlord you don't mark to market the price of your rental properties. And if your accounting does not reflect the current market value of your reserves, numbers like "50 cents on the dollar" are plucked out of thin air by journalists who want to shock readers.