Blog by Sumana Harihareswara, Changeset founder
Brewster's Millions And The Definition of an Asset
The other day, Leonard and I watched the 1985 Richard Pryor film Brewster's Millions. In case you haven't seen it, Brewster's Millions is a comedy with a wacky premise: someone finds out that they've inherited a bunch of money, but with weird conditions. They have to spend a chunk of the money really fast (in the film it's USD$30 million within 30 days), without accruing any lasting assets from those purchases. They can't just donate it or gamble it away or give it as gifts to individuals.* And they can't tell anyone else about the conditions of the will and the reason why they're spending as they are. The heir must demonstrate that they've spent everything by submitting receipts.
The movie's based on a book published in 1902 that people have adapted into more than a dozen movies. And we'd never read it or seen any of the films before, but I presume that a big part of the appeal is that you also get to fantasize: how would you solve this puzzle?
As Leonard pointed out: the first thing to do, perhaps, ought to be to hire professional assistance: experts who could research and advise you on how to do this. But then of course the problem reduces to: what ought those experts suggest?
Some options (and some of these are things Brewster indeed does in the film):
A few possible loopholes:
Thinking about this reminds me of taking that corporate accounting class back in 2006, as I was starting my master's in tech management, where I learned the definition of an asset. An asset is something you now control, thanks to a past acquisition or transaction at a measurable cost, that you expect will give you economic benefits in the future. And thus that's when I learned that employees don't belong on the balance sheet, because the employer doesn't control them, and because the benefit they'll get from that employment is in the future, not the past. Which means it's harder for a company to quantitatively account for the value that it gets from having particularly awesome employees, use that valuation as support when seeking investment or loans, etc. Accounting is weird:
Every so often I have to remind myself that I am studying not the world as it is, but an internally consistent subset, a continent or a country where profit is the primary motive, taxes are to be avoided, debt has no moral status, and every business is a corporation responsible to shareholders.
Many years later, as a consultant, I'm reflecting on the value my work provides and how intangible it can feel at first. Demonstrating the value often takes a little work -- a case study, after-the-fact qualitative or quantitative assessments, etc. It's there, though!
If Montgomery Brewster were a solo open source software maintainer, would spending money on Changeset's services be allowed within the terms of the will? I think so, based on the understanding that the open source project itself isn't accounted as one of his assets. His project is likely not trademarked (just going off statistical likelihood) so that intellectual property asset wouldn't be a problem. Can you list maintainer privileges for an open source project on your balance sheet? My initial assessment would be "no" (or that it lands in the fuzzy "goodwill" category) but I'm willing to be corrected by experts.
* In the 1985 film, Brewster is limited to donating up to 5% and gambling up to 5% of the $30 million:
You have to spend the thirty million, but after thirty days you're not allowed to own any assets. No houses, no cars, no jewelry. Nothing but the clothes on your back! Now, you can hire anybody you want, but you have to get value for their services. You can donate five percent to charity and you can gamble another five percent away, but you can't give this money away, and that includes buying the Hope Diamond for some bimbo as a birthday present. ...[and] You must not destroy what is inherently valuable, that's instant disqualification.
** Caution that you may stumble into The Producers if you choose this approach.
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