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Love fessons from Accounting

WHEN I was still in college, I had always thought of love and accounting as two opposite poles (accounting is boring and love is exciting… or is it the other way around?) and mutually exclusive energies (one cannot coexist with the other). As most dictionaries would define, “Accounting is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting, and communicating financial information.” At first, I thought accounting is a science when, in fact, it is not. Accounting is an art. Love, on the other hand, is defined as “an intense feeling of deep affection.” If accounting is an art, then love is a mystery. How then is love related to accounting?

For so many years, I have read various accounting books and most of the accounting standards adopted in the Philippines. So far, none was mentioned about love. In the Philippine Financial Reporting Standards, we have accounting for inventories, revenues, property, plant and equipment, and even agriculture… but accounting for love? Never. It makes me wonder, if love is an asset, how do we account for love? How do we record it in our books of accounts called life? Is it similar to how we account for goodwill, patents, computer licenses, and other intangibles? Does love qualify as an intangible asset, or is it another kind of asset yet to be developed in the accounting world?

I have finally realized that love and accounting are not two different worlds. Accounting is love and love is accounting. I have always fancied love as the twin brother of accounting – similar, but not entirely the same. Finally, I share with you some of the love lessons I learned from love’s equally good-looking brother, accounting.

The asset recognition principle in accounting requires that an asset be recognized in the balance sheet only when it is probable that the future economic benefits will flow to the entity and that the asset has a cost or value that can be measured reliably. Can love be considered an asset (or a liability)? Can one value his/her feelings for another person? If love is an asset, it might be considered the most undervalued asset in the balance sheet. There are times when people do not value the feelings of other people. We do not see a person’s true worth. You cannot capitalize something that you do not expect to generate profits in the future or has no probable future use. There is no point in recognizing this asset if the fair value is zero (or worse, negative and only contributes losses and negativities in your life). These kinds of feelings do not pertain to love (or do they?), as these only hurt us repeatedly and will only promote negativity. Why not write off these feelings entirely? How I wish it is just that easy… but it is not and never will. Moving on is difficult and painful. Why not just provide allowance for impairment of feelings? Maybe it is not as savage as a write-off, but it only implies that you are still hoping that you can still “collect” the feeling of being loved from the other person when, in fact, chances are slim. Can we love without expecting to be loved in return? In such a case, love takes the form of a donation, which is unconditionally given, and not an asset.

In our relationships, we make decisions, exercise judgments, and take risks, just like how businesses face risks daily. In accounting parlance for instance, we define credit risk as the risk that a counterparty may fail to discharge an obligation. Loving someone, in the same way, also involves credit risk. There is always a risk that someone you love may not love you back. They may not reciprocate the feelings you have. Unlike banks and other financial institutions that extends credit to borrowers, in love, there are no collaterals. A relationship is something that is built on trust and confidence. It is not about you alone, but about the two of you. “Everybody in this world is scared… and sometimes, it takes two scared souls to do one brave thing: to fall in love.”

Is love really like double-entry accounting? A debit always goes with a credit. When you debit love as an asset, do you credit income or liability? Crediting income is probably the most convenient thing to do, but I believe that a liability is more appropriate in general. You cannot give something that you do not have. It always takes two to tango: one to give and another one to receive. The feeling is mutual and so is the responsibility. When you are in a relationship with someone, you are committed to that person. Love requires effort. The other person expects you to recognize a provision equivalent to a reasonable portion of your time for them. Love as an asset is volatile in a way that the fair value of love may increase in the same way that its carrying value may also depreciate over time. It will depend on how you give premium and importance to the relationship that you have and ultimately to the other person that you are saying you love. I have read a quote that goes: “Without communication, there is no relationship. Without respect, there is no love. Without trust, there is no reason to continue.”

Entering into a romantic relationship with someone is like entering into a lease agreement. You are giving the other person the right to occupy your life. In the case of love, personal judgment may also be exercised by the lessor (“the giver”) to distinguish the relationship as either likened to a finance lease (risks and benefits incidental to ownership of the leased item is transferred) or an operating lease (ownership is not transferred). Are you really committed to love the other person, or are you just temporarily using them to your advantage as the lessee (“the receiver”). Love is far deeper than a lessor-lessee relationship. There is an element of intimacy. A lease in accounting is lifeless, but love is full of emotions waiting to explode.

Going concern is a basic underlying assumption in accounting. The assumption is that an entity will be able to continue operating for a period that is sufficient to carry out its business. In the same way, a relationship continues to exist, unless there is an intention to liquidate (i.e., to cease the relationship). If there are events or conditions identified that may cast significant doubt on the ability of the relationship to continue as a going concern, necessary actions should be carried out to address these events or conditions. These conditions may be as simple as a petty misunderstanding, differences in views, external conflicts (third party perhaps?) and even the extent of falling out of love (the spark is gone or is it?).

A relationship is like the financial results of the business. There are times when you make a decent profit. There are also times that you incur losses. As the writer Susan Gale says, “Life is like a ferris wheel. One minute you’re on top, the next you’re at the bottom. Just stay in your seat, enjoy the ride, and hang on until you reach the top again.” There will always be challenges to test the relationship in the same way as businesses encounter problems and difficulties in their operations. When you are still young and starting, it is expected that you encounter some struggles. This is what we call the adjustment period. You have to reconcile the differences (remember, in your trial balance, debits should always equal the credits). You make adjustments for a relationship to last, just like how you make adjustments in your financial statements for it to be fairly stated. Sometimes you have to compromise. There are no strict rules.

Love, and even life in general, is not entirely likened to a book of accounts. When you commit mistakes, there are times when it is not as easy as posting a correcting entry. Sometimes, the effect can be irreversible. There is no going back; you have to face it no matter how dark the road ahead may seem. Trust, when broken, is very difficult to restore (allowance for the cost of dismantling and restoring the leased properties to their original condition will not be enough). Love yourself first. As the saying goes, it is better to have loved and to be hurt than to have never loved at all.

We learn from our mistakes. Nobody is perfect. Even big companies have misstatements in their financials in one way or another, may it be unintentional (referred to as an “error” in accounting) or intentional (“fraud”). What is important are the steps we make to go about and correct these misstatements. We have to be responsible and accountable for our own actions and decisions.

In the corporate world, we follow accounting standards but, in real life, in our relationships, we follow our own instincts, we live through our own experiences. There is no such thing as black and white when it comes to love. What may be right for you may not be right for another. Follow your heart and allow it to lead you to the right path. No standards can dictate how you handle your relationships…use your own judgment, weigh your options, and live the life you want.

 Mr. Mamacus is a manager of Audit & Assurance, P&A Grant Thornton, a leading audit, tax, advisory, and outsourcing company in the Philippines with 21 partners and over 850 staff members. It is present in Makati, Cavite, Cebu and Davao. For comments on this article, please email

As published on Mindanao Times dated 12 December 2017.