Financial Classification
How financial facts are classified as fixed costs, offering costs, shared costs, or routed revenue.
Financial classification
A Ledger Event records that value moved; its classification records what the movement means for the business. Every event carries two independent axes: an event type for the accounting action, and a business classification that decides whether the event lands as a fixed cost, an offering cost of goods, a shared cost of goods, or routed contract-split revenue.
How It Works
The business classification is required and explicit: it is recorded on the event, never inferred later. A fixed-cost event is borne by a node and not tied to any offering, so it adds to that node's fixed-cost total. An offering cost-of-goods event names the offering whose P&L receives the cost. A shared (general) cost-of-goods event is borne by a node but not attributed to one offering, so it pools at node level and is only spread across offerings later by an allocation calculation. A contract-split event routes value to a receiving node, where it can count as that node's period revenue.
Statements
These statements fix how classification feeds the derived views:
- A Ledger Event has an event type.
- A Ledger Event has a business classification.
- A fixed-cost classification contributes to the Node fixed-cost total.
- An offering cost-of-goods classification contributes to the realized cost of an Offering.
- A shared cost-of-goods classification contributes to the general cost pool of a Node.
- A contract split revenue classification contributes to receiving-node revenue.
Why It Matters
Classification is what lets a flat stream of events resolve into a readable P&L. Without it, a payment is just an amount; with it, the same payment is unambiguously a fixed cost for one node, a cost of goods against a specific offering, or revenue for a receiving node. The two axes are kept distinct on purpose so neither collapses into the other.