You're following the rules, accepted accounting practice. That's fine I understand that.
I'm just pointing out the inconsistency that's all.
I'm perfectly happy that people might want to value something on what it currently can be sold for. Especially a third party may want it this way.
If you're the asset owner though, and you've bought something that has a guaranteed future return specifically for that reason - to be guaranteed, zero risk as long as you hold to maturity - then I think it's perfectly reasonable for that value to be the value you think of first and what you assign.
I don't think it's an overstated valuation, it's simply a 'wait until maturity' valuation. As long as the premise of the valuation is understood by all parties there should be no issue. Problems may arise if the premise of the valuation is concealed and parties make incorrect assumptions about the valuation.
I'd value a stock at what I could sell it for because it doesn't have a guaranteed future value. The word guaranteed is the key difference here to me.
If you're guaranteed something why wouldn't you include it?
Example - you win the set for life lottery. £10k a month for the next 30 years. Your worth includes this IOU even though you don't have the cash in hand. It's future guaranteed income and you can (surely) count this in your valuation of your assets?
In principle only, why is this different to a future guaranteed income from a bond?
We argue a lot because I see things a bit differently and perhaps take these arguments too far. It's nothing personal I hope you realise this. I don't think it's reasonable to label me as thick as you have done. I'm questioning things because I'm curious and I see things differently sometimes. And I don't like inconsistency in rules.
I think your placing far too much weight on the guaranteed value being enough to change the fundamentals of accepted valuation.
There has only ever been one other occasion I have come across something similar to your approach, and IMO it was misleading and it was changed.
ZOPA used to in the early P2P days calculate the ending balance when all loans were repaid and as such people used to vastly overstate their ROI.
As I said if your taking the future value today as a given your inflating current ROI and your future will be zero for that asset.
Its very daft if its a long dated bond as you will show a sudden massive ROI year 1 and nothing for next XX years.
The reason everyone uses now is that they want a single valuation at a single point in time.
As I said a fixed interest account is also guaranteed in value. Would you use the guaranteed interest value now, but not on an account that is variable.
Can you not see how that would create a massive opportunity for fraudulent and dishonest practice in asset valuations?
And FWIW I am not saying you are thick, just that you seem to be wilfully wanting to ignore accepted practice and disparaging all those who say it needs to work that way because of reasons.
There really is no inconsistency, everything is valued at current date, based on what its worth is. Your penalty thing is a very niche argument and in reality some of these sorts of thing could be missed, but as I said before, ongoing basis.
