Theoretical Question here - When looking at an individual’s financial balance sheet versus their economic/extended balance sheet, where would you place something that has a $ valuation but represents future earnings to be paid out. For example, a VC Partner’s carried interest or a film actor’s royalties that have an assigned value.
Intuitively, they could be put on a financial balance sheet given i) they are claims to existing assets and ii) they have an assigned financial value. The economic arguement is that these are to be paid out over a number of years as compensation for work.
The question isn’t whether or not they’ll be paid out over a number years, it’s whether or not they’re already earned. If they’re already earned, they belong on the financial balance sheet. If they’ve yet to be earned, they don’t, but they may belong on the economic balance sheet.