Chapter 216: Fixed Assets Calculation Method

Chapter 216 Fixed Assets Calculation Method

The next morning-after Pei Qian woke up, he opened the creator platform in Aili Island and looked at the statistics of the video.

There were some views and a few comments and bullet screen comments. However, they did not add up too much. The video was still very unpopular.

Most comments and bullet screen comments were along the lines of ‘oh sh*t’, ‘baller’, ‘an explosion of funding’ and ‘they had too much money so they chose to burn them’.

Pei Qian’s account was new. After uploading the video at the electronics area, he did not receive publicity from the platform; and he did not have any subscribers to begin with. There was only some insignificant organic traffic. There was almost no exposure for the video throughout the night.

Pei Qian did not care about that. He did not expect the video to have many views.

If there was really someone who tipped his video or if he could join the incentive plans of the platform, he could just think of it as he had earned some pocket money. It seemed like a nice plan to him.

Pei Qian was eating snacks as he binge-watched some videos. All of a sudden, the system screen expanded in front of him.

<Wealth Conversion System>

<Owner: Pei Qian>

<Profit Conversion Ratio 100:1. Loss Conversion Ratio 1:1>

<Next Settlement: 93 days later.>

<System Funds: 2,430,000 (+5,570,000)>

<Fixed Assets: A semi-commercial villa at Ming Yun Villas (6,620,000)>

<Personal Wealth: 357,412.5>

<This Week’s Special Task: Making profits and incurring losses are all part and parcel of business. The owner seems to be caught up with the profit he is making. This is not the attitude a talented businessman should have. The System advises the owner to achieve a loss before the next settlement date.>

<Special Task Completion Reward: A mysterious surprise within the System’s regulations.>

<Special Hint:>

<10% of the system’s valuation of the company’s fixed assets shall be recorded into the System Funds. That will affect the settlement results.>

<Recalculating System Funds amount…>

<System Funds: 2,430,000+620,000 (+4,950,000)>

<Fixed Assets: A semi-commercial villa at Ming Yun Villas (6,620,000)>

<Personal Wealth: 357,412.5>

The chips that Pei Qian held near his mouth stopped mid-air.

What was the meaning of this?!

He read the content on the system screen carefully. When he saw the ‘Fixed Assets’ column, he vaguely understood what happened.

Previously, most of the expensive resources he had were all rented, including the office building and cars. Therefore, the ‘Fixed Assets’ column was not triggered.

Of course, the tables and chairs, furniture and office products that he had bought for the company and the internet cafes should all be considered the company assets. However, they did not trigger the ‘Fixed Assets’ column.

It was likely because the system disregarded these things as their prices were too insignificant.

However, now that Pei Qian bought a 6-million yuan villa, the system could not disregard that anymore.

According to the rules of the system, such fixed assets in the form of commodities would undergo valuation by the system. 10% of its estimated worth would be converted into the System Funds and would affect the settlement results.

Pei Qian had just spent a large sum of money on the villa. The company’s current book balance was 2,430,000 yuan while the starting sum of the System Funds was 8,000,000 yuan. According to his previous calculations, he should suffer a loss of 5,570,000 yuan.

However, according to this new calculation method, if he converted and recorded 10% of the estimated worth of 6,220,000 yuan villa, he would only suffer a loss of 4,950,000 yuan! 8,000,000 – 2,430,000 + (6,220,000×10%) = 4,950,000

The newly indicated System Funds was 2,430,000+620,000. The first 2,430,000 was the working capital on the company’s ledger. That was the money they could spend. The following 620,000 was 10% of the villa’s estimated worth. Even though it was converted into a virtual number that could not be spent, it was still considered a part of the System Funds and would affect the settlement.

Pei Qian scratched his head. His first reaction was that he was actually unsure if that was a good deal for him.

You are reading story Losing Money to Be a Tycoon at novel35.com

Evidently, this rule that the system set reduced the restrictions Pei Qian had to when buying commodities as fixed assets.

For instance, if such commodities were not recorded under the System Funds, Pei Qian could totally buy anything he wanted. As long as he ensured that the capital chain would not break, he could buy as many properties as he liked to create a loss.

(Of course, a prerequisite was that he must justify his purpose when buying them. He was not allowed to do real estate speculation or live in those properties. He could only use them for production management like he did this time around.)

For example, if there was 10 million yuan left in the System Funds and Pei Qian took out 7 million to buy another villa (and found a random use for it), he was left with 3 million. He could easily create a loss of 5 million when compared to the initial 8 million System Funds in the beginning.

That evidently reduced the difficulty of creating a loss.

Therefore, Fixed Assets also needed to be recorded as the System Funds.

However, if the entire sum of the fixed assets was recorded under System Funds, another huge problem would arise.

The starting sum of the System Funds was only 8 million. If Pei Qian bought a 10-million villa and the entire 10 million was recorded into the System Funds, it was difficult for him to lose the starting sum of 8 million unless he mortgaged the property or sold it.

Therefore, the system chose this method to avoid both aforementioned situations.

Such commodities under one’s fixed assets would be recorded into the System Funds on a 10% basis. On one hand, that would give Pei Qian some room to purchase fixed assets when he wanted to create a loss. On the other hand, Pei Qian could not easily achieve a huge loss by purchasing fixed assets mindlessly.

“Ah… thinking about it from a pessimistic perspective, the system has yet again blocked off another path that I could have taken to earn fortunes. The system is always one step ahead of me…

“However, thinking from the positive side of things, if the system did not give me a reminder; I would not be able to come up with that idea easily…”

Pei Qian suddenly realized that although purchasing fixed assets could affect the settlement results, it was ultimately still a good way to spend money!

Assuming that Pei Qian had about 10 million yuan left in the System Funds, he could simply buy another villa or shop. If he spent 5 million yuan on that, the amount left in the System Funds would be:

10 million – 5 million + (5 million x 10%) = 5.5 million.

In that case, the system would conclude that he had suffered a loss of 8 million – 5.5 million = 2.5 million!

Of course, there were some risks involved in that. If Pei Qian had multiple fixed assets, the appreciation of a single fixed asset would result in the System Funds increasing rapidly as well.

If the value of the villa that Pei Qian had suddenly increased insanely and appreciated to 30 million yuan, the amount recorded into the System Funds would then increase to 3 million based on the stated 10% ratio.

10 million – 5 million + (30 million x 10%) = 8 million.

He would not be able to suffer a loss then!

If the situation worsened—when Pei Qian had too many fixed assets, their total value could surpass the starting sum even if only 10% of their estimated value was recorded in the System Funds. If that happened-even if Pei Qian spent all the money in the company’s book balance, he would still be unable to create a loss.

The only way out was if those fixed assets depreciated or if Pei Qian sold them all and spent the money he earned.

Anyways…

Opportunities and risks coexist.

After some calculation, Pei Qian felt that his head was throbbing.

“What is happening? Why do I have to use so many brain cells to find a way to lose money? Why are the rules getting more and more complicated…?”

Pei Qian decided that he was not going to think about that anymore.

In the future—when the amount of System Funds increased to about 20 or 30 million, he would then spend a few million yuan to purchase some shops. That would only add a few hundred thousand yuan to the System Funds and was a good deal for him.

Currently, he did not have much money in the System Funds. Buying too many shops could easily turn things against his intentions. He had to take it slow.

If he was cautious, he should only spend the money at the last moment.

During this cycle, it was sufficient for him to purchase the semi-commercial villa and open the high-end restaurant to lose money.

Since the system gave him a reminder, that showed that the villa had been purchased and the relevant procedures had been completed.

Pei Qian gave Assistant Xin a call and asked her to drive him to the Ming Yun Villas branch of the Fish-Catching Internet Cafe.

He wanted to settle the interior design of the high-end restaurant and check if there were any unexpected changes to the business environment there.