Align Accounting with Economics for True Value

Private capital views companies differently than public market investors due to the impact of accounting practices, particularly regarding depreciation. Non-economic depreciation can misrepresent a company's value, as long-term investments are expensed too quickly, skewing financial statements. Furthermore, significant customer acquisition costs, crucial for long-term retention, are immediately expensed, further concealing the company's true economic potential. Adjusting accounting to better reflect actual economics enables a clearer picture of profitability and growth, revealing that these companies can be valued reasonably against market P-E multiples, highlighting the importance of aligning financial practices with underlying economic realities.