[ad_1]
The longing for space exploration is as ancient as the history of mankind itself. Once regarded a total impossibility, now staggering new heights of accomplishment in space exploration have been reached thanks to the technological advances made since the beginning of the 20th century. Today, some space researchers even predict that space flights could become a routine part of our daily travels within the next 50 years.
As economic and technological conditions alter over time, accounting practices must change and adapt accordingly – and as a science, accounting will not be able to remain detached from the developments experienced, or projected to be experienced, in space. Historically, the act of going into space itself was perceived as a mammoth task, and once achieved, space law had a strenuous time catching up, grappling with which laws and methods the errant American astronaut should be tried under. Similarly, developments in space activity will have consequences for accounting science. The need will arise for accounting to examine, evaluate and report space activity within its own field of interest, just as in aerospace engineering and space law. As the size of the space economy grows, it will be necessary to seek and find answers to many questions that may arise within the science of accounting, such as:
• How will the space economy affect accounting science and the accounting profession?
• What is the place and significance of accounting in sustainable space activities?
• Will it be possible with the current accounting system to solve the problems that may arise in the accounting and reporting of economic activities in space?
Due to the structural characteristics of economic activities in the space industry, existing accounting practices and systems may be inadequate to solve such situations, which is a serious point for consideration. In any case, all laws and scientific foundations are based on events and requirements experienced in today’s world. An international accounting expertise, including new measurement methods and units, will be an absolute requirement for appropriate and reliable accounting and reporting of activities in space – if not today, then tomorrow. This requirement will reveal the necessity of developing a common accounting language that will enable similar events to be understood and interpreted in a similar manner from the scientific perspective.
Simply put, accounting involves a set of assumptions, frameworks and methodologies used to produce realistic and relevant financial reporting. As a constantly developing field of science, it seeks new ways of doing business, new technological developments and new solutions to new information demands in order to adapt to today’s world. As progress continues, especially in fields such as space exploration, asteroid mining, space tourism and space production, issues that might cause problems for accounting will emerge.
Will accounting need to alter much when it deals with outer-space activities? Certainly not, but we will definitely encounter basic issues such as how financial reporting should be done, which accounting measurements and valuation methods should be used, and which currency should be used when preparing financial statements. It is necessary though, especially after new discoveries in space, to investigate and examine the kind of costing models, financial reporting standards, and skills that will be required for accountants if space production is to commence. This is important in order for space activities to be sustainable. The key issues that may arise in the science of accounting, as the space economy develops and possible space discoveries are made, are given in Figure 1.
Figure 1: Key issues in the science of accounting that may arise with space discoveries
Examining the science of accounting in space will require a review not only of applications and financial reporting, but also of business processes and auditing. As seen in Figure 1, the problems associated with space accounting include some issues that can be resolved with the help of interdisciplinary approaches involving new concepts and principles: accountants should be prepared to consider these kinds of approaches. It will be crucial to have a holistic understanding of the science of accounting, which will incorporate vastly more than a probable change in the existing standards.
The construction of a hotel in space is a target of some companies. From the point of construction, in addition to applying the depreciation method for the assets of the hotel(s), consideration of the valuation and costing methods of the stocks – including the set of rules determining the values within which financial events and transactions are deemed to take place in space – will need to be recorded. How they will be classified, and with which reports they will be presented in the agenda, will be significant, and the following points will need to be taken into consideration:
· How the accounting records of the economic activities occurring in space will be kept
· How and in which accounts income and assets will be traced
· Which methods and principles will need to be used in costing processes
· How taxation processes, which have a special importance for governments, will be conducted.
It needs to be determined whether or not the relevant sectors should have specific measurements and value units or even a brand-new monetary unit in the form of space currency. It is possible that they will follow pre-existing concepts such as cryptocurrency. It may be necessary to establish special unions or organizations, such as chambers of commerce or industry, for such issues as commissioning, authorization, classification, limitation, permission, auditing, and surveillance at various stages of space activities, pertaining to the regular industry procedure. If so, it will be necessary to determine who is responsible for decision-making and for drawing up regulations regarding the structure of this institution. The fact that there seem to be no clear answers to these questions suggests that both existing practices and standardized reports may not be sufficient in the sphere of space accounting – in which case, alterations and additions will have to be made to the existing accounting standards.
When the space industry is considered within the framework of economic activity and the concepts expected to take place within it, it will be deemed necessary to determine the costs and to track and report the activation of vehicles that will take passengers into space. Construction, activation and cost determination of living spaces to be established on any planet, hotels to be accommodated, and satellite stations to be used for re-fueling need to be addressed in a good framework. Taking these factors into consideration, it seems inevitable that a field of expertise such as space accounting will be born.
At this stage it would be useful to provide a working definition to enable further deliberation on the concept. Space accounting may be defined as “a sub-specialty branch of accounting science that enables the creation of accounting standards and information systems for the purpose of monitoring and reporting all economic activities that occur during the discovery, research, understanding, management and exploitation of space, and to enable the institutions to make conscious decisions on space activities and ensure sustainability”. The term “space” here refers to the activities conducted in space, rather than the space-related acti
vities conducted on Earth.
Undoubtedly, space accounting will continue to take shape with the development of economic activity in space. When we consider the functions and purposes of space accounting in the present circumstances, we come across several significant points. Obviously, its general purpose is to produce information that explains the interaction between space activities and the economy. Additionally, it can act as an important catalyst for space exploration and for the growth of the space industry. As space accounting is a multi-disciplinary concept in which accounting, space sciences, law and economics are involved, it will undoubtedly enable integrated reporting that takes into account the financial and non-financial data of the enterprises and explains the situation within the framework of sustainability.
The following recommendations can be developed, so that the space accounting – proposed as a new field of expertise – can function effectively and provide benefits:
· There will be a need for an expert authority that ensures integrity and uniformity by considering the properties specific to space when providing solutions to key problems – such as the technological infrastructure, contracts and human resources, currency to be used, valuation methods, international agreements, costing models, auditing, skill sets, taxation, sustainability, and integrated reporting (which are assumed to constitute the scope of space accounting).
· International Accounting Standards will need to provide a system of rules and principles that determine the format and content of financial statements. These standards should cover how to account for stocks in space, depreciation, research and development costs, income taxes, investments, and tangible and intangible assets. An effective, understandable and applicable set of space accounting standards will provide significant added value to businesses operating in space and the countries these businesses belong to.
· As accounting is a system that records and reports actual and existing financial transactions and events, one might ask how accountants can form an opinion on an event that has not yet happened. However, it will be necessary to understand and interpret space activities based on expected scenarios, and adapt them in accordance with regulated accounting processes. For this purpose, we need working groups that can create the necessary simulations, projections and models to bring the complex economic activities in space closer to reality. These working groups should include personnel with the appropriate knowledge, experience, and competence to discuss and investigate topics such as space tourism, space life, space production, asteroid mining, and space discoveries, and could be referred to as “space accounting experts”. The authority responsible for inspecting the activities of these working groups, and for the selection and authorization of the people assigned to them, could be called the “International Space Accounting Standards Board”. In this way, it will be possible for accounting science to follow and analyze more closely the economic developments in space, such as engineering, astronomy, and physical sciences, so that the relevant accounting science will be fully established by the time the related field of business starts to operate.
· Space accounting experts will be expected to know the terms, concepts, measurements, weights and calculations used in space activities pertaining to this field and have the competence to manage each process. In this context, internationally recognized professional competency certified programs in space accounting should be organized for space accounting professionals. When determining the certificate education program, science branches or disciplines such as physics, biology, mathematics, engineering, and internet and information technologies should also be utilized in order to provide the satisfactory skills required for space research.
· Considering that money and all monetary concepts will eventually pass through accounting science, space accounting can be proposed as an interdisciplinary field of study based on spatial, social and temporal relations at the intersection of sciences such as economics, physics, psychology, geography, architecture, engineering, philosophy, history, and sociology. Undoubtedly, experts working in accounting science will be able to find answers to the problems related to space with an interdisciplinary approach by making use of the branches of science mentioned above.
In conclusion, just as the accounting practices and reporting of companies doing international business are conceptualized by being placed in certain contexts over time, it will become a prerequisite for the companies conducting business in space to have the revenues they gain or costs they incur accounted for, presented in financial tables and subjected to taxation. Considering current developments and increasing technological capabilities, it is necessary to carry out studies in the field of space accounting, to establish teams to carry out these studies, and to take critical precautions to avoid falling behind the innovations of the age.
[ad_2]
Source link
