My point was that the loan created funding for a capital investment not a deposit. The deposits are just a transitory state of money. What you describe is more like a line of credit than a loan. Usually loans are to cover a particular purchase and the money does not really become a deposit in the borrowers account it becomes at best a deposit in someone else's account. Get a car loan or a mortgage, the money does not ever get into your account as a deposit.

Mortgage company gets a deposit, property owner maybe gets a deposit (maybe they just retire debt), real estate agent/broker gets some money. I get a debt. I never get a deposit.

From the business point of view the loan does create a shovel. Every shovel sold makes a new shovel in a just in time inventory world.

You were looking at it from the point of view of an accountant. I was looking at it from the point of view of a business or individual. Even a shovel purchased at cost depreciates the second it is purchased unless it is going to be maintained in an unused condition. Well, could be that the shovel market might be disrupted and shovels become scarce. That is why we should use present value for assets.

I know that a ledger needs a value for everything but in the real world sometimes we live with a great deal of uncertainty. The ledger provides a kind of certainty that is not real.

You said a check becomes a deposit once it is deposited. Checks can be cashed not deposited. I often do that. Do you consider cash in my wallet a deposit. I guess in a ledger, it might be so. In my world the cash in my wallet is off the books. CPA's don't like it when things are off the books. Can't let the auditor know about such things.

My Dad was a CPA, he graduated from Northeastern University. His first jobs were as an Auditor, 70 years ago.

I don't mean my responses to be demeaning. I believe you know what you are writing. I think it is the work of a knowledgeable person.

TEK