Definition of Financial Value is Too Restrictive

[seankerm]

'Financial Value'[ont00000608]
has def: "A quality that inheres in an independent continuant to the degree that that independent continuant can serve as a medium of exchange in an economic system at a particular time."

Stocks and Bonds seem to straightforwardly have fiancial value. However this value does not seem to be tied to the capacity to serve as a medium of exchange.As it is not clearly defined in CCO, I take medium of exchanges to mean any item that is widely acceptable in exchange for goods and services (definition from wikidpedia article titled "Medium of Exchange"). For example, series EE U.S. Savings Bonds are non-transferable and can only be redeemed with the U.S. Treasury and thus cannot be directly exchanged for goods and services.

Secondly, 'Fiancial Value of Property' is a subclass and
has def: "Financial Value that inheres in an material entity that is the object of an Act of Ownership."
However the financial value of property does not seem to come from its ability to serve as a medium of exchange. For example, I would not exchange my computer for goods and services but I could exchange it for money and then use that as a medium of exchange.

Is this definition misnamed and capturing something specific to money or is the definition too restrictive and does not capture all entities with financial value? Or does medium of exchange have a more specific meaning?

[seankerm]

Definitions for CCO:

Quality

Financial Value 

Role

 Financial Instrument Role 

      Medium of Exchange Role 

Material Entity

 Financial Instrument 

      Medium of Exchange 

Planned Act

 Act of Trading 

      Act of Direct Trading (Act of Bartering) 

      Act of Indirect Trading (Act of Purchasing) 

          Act of Buying 

          Act of Renumeration 

          Act of Renting 

Act of Financial Instrument Use

FinancialValue =def. “A quality that inheres in an independent continuant to the degree that that independent continuant can serve as a financial instrument in an economic system at a particular time.”

FinancialInstrument =def. “A material entity that bears some financial instrument role.”

FinancialInstrumentRole =def. “A role that inheres in a material entity when it is accepted by a group as the means to resolve a financial social problem, and, if realized, is realized in an act of resolving said financial social problem.”

MediumOfExchange =def. “A material entity that bears some medium of exchange role.”

MediumOfExchangeRole =def. “A role that inheres in a material entity when it is accepted by a group as a means of indirect trade, and, if realized, is realized in an act of indirect trade.”

ActOfTrading =def “A Planned Act wherein goods and services are exchanged between Agents”

(Act of Bartering)

ActOfDirectTrading =def “An Act of Trading wherein goods and services are exchanged by an Agent to acquire goods and services from another Agent.”

(Act of Purchasing)

ActOfIndirectTrading=def “An Act of Trading wherein a Financial Instrument is used as a Medium of Exchange by an Agent (the Purchaser) to acquire goods and services from another Agent (the Provider).”

ActOfBuying =def "An Act of Indirect Trading wherein a Financial Instrument is used as a Medium of Exchange by an Agent (the Buyer) to acquire ownership of a good from another Agent (the Seller)."

ActOfRenumeration =def "An Act of Indirect Trading wherein a Financial Instrument is used as a Medium of Exchange by an Agent (the Employer) to compensate another Agent (the Employee) for the services they perform for the Employer.”

ActOfRenting =def "An Act of Indirect Trading wherein a Financial Instrument is used as a Medium of Exchange by an Agent (the Renter) as a payment to acquire temporary possession or use of a good or property that is owned or controlled by another Agent (the Seller)."

Above are the proposed new definitions discussed and presented in the CCO developers meeting 1/20/26 as well as new definitions regarding Acts of Direct and Indirect Trading.

The newly proposed Act of Trading class and its subclasses do not inherently use material artifacts nor financial instruments and should thus be a direct subclass of Planned Act rather than a subclass of the current Act of Financial Instrument Use. The previous “Act of Purchasing” and its subclasses have had their definitions altered to reflect the proposed addition of Medium of Exchange to CCO and been renamed Act of Indirect Trading. The other subclass of an Act of Trading is an Act of Direct Trading which constitutes bartering.

Similarly, it seems like the definition of Act of Donating should be looked at as currently only financial instruments can be donated, but property can be donated (for example clothes or home goods). It needs to be decided if property is a kind of financial instrument as currently only stocks, bonds, and portions of cash as subclasses of financial instrument.

Finally, it seems that Act of Financial Instrument Use should be turned into a defined class for now (equivalentTo ActOfArtifactUse that realizes some FinancialInstrumentRole). The label should be changed to ‘Act of Artifactual Financial Instrument Use,’ since financial instruments are not limited to artifacts.

Later it might make sense to just deprecate ActOfFinancialInstrumentUse, if the anticipated disruption to users is limited, since the acts are better modeled in the new ActOfTrading branch.

[APCox]

Recommendations from the CCO WG meeting yesterday:

1. Suggest deprecating Act of Financial Instrument Use and creating Act of Financial Transaction as a direct subclass of Planned Act
2. Make the new Act of Trading a subclass of Act of Financial Transaction
3. Make Act of Donating and other current subclasses of Act of Financial Instrument Use subclasses of Act of Financial Transaction, reviewing each to determine whether they belong under Act of Trading
4. Consider labeling Medium of Exchange as Material Medium of Exchange
5. Take the key examples and rationale for making (or not making) various distinctions/assertions from the slides that were presented to create annotations for the relevant terms using skos:example and skos:scopeNote as appropriate

[seankerm]

Attached is a paper detailing the proposed changes regarding Financial Instruments and Financial Value. You may skip to the appendices for tables of proposed changes and an updated proposed hierarchy.

Financial Instruments Revision Proposal.pdf

[CarterBeauBenson]

FinancialValue =def. “A quality that inheres in an independent continuant to the degree that that independent continuant can serve as a financial instrument in an economic system at a particular time.”

I would take it a step further. It has never been clear to me that financial value is a quality, since a thing can lose all of its value without changing materially. We would have to believe that having no financial value is still having a financial value. But this is dissimilar to other qualities, since for a thing to have no mass, it would have to not exist in any way.

The use of "can" makes it sound like a realizable. Qualities are, roles and dispositions can. This makes it sound like the financial value is realized when it used to do stuff in an economic system.

The definition also gives measurement vibes. What does it mean for a quality to inhere in something to a degree? Typically, qualities like mass and spatial extent just inhere, and their degree, 5 grams, 3 inches, are measurement ICEs that measure the quality.

[avsculley]

FinancialValue =def. “A quality that inheres in an independent continuant to the degree that that independent continuant can serve as a financial instrument in an economic system at a particular time.”

I would take it a step further. It has never been clear to me that financial value is a quality, since a thing can lose all of its value without changing materially.

A thing can lose its weight quality without changing materially by going to a possible world without gravity. Weight is a quality. So, the fact that you can lose X without changing materially doesn't entail that X isn't a quality.

We would have to believe that having no financial value is still having a financial value. But this is dissimilar to other qualities, since for a thing to have no mass, it would have to not exist in any way.

We need to distinguish between not having a financial value quality and having some measure of a financial value quality be zero. A measurement of zero doesn't mean that there is no financial value quality. It depends on the scale and unit being used. Just as a temperature measurement can be zero, but the measured thing can still have a temperature quality depending on the scale and unit being used.

The use of "can" makes it sound like a realizable. Qualities are, roles and dispositions can. This makes it sound like the financial value is realized when it used to do stuff in an economic system.

"Can" refers to the role or roles that the financial value quality depends on. The quality is, but has different magnitudes depending on the financial instrument roles that inhere (i.e., the degree to which the independent continuant can serve as a financial instrument).

The definition also gives measurement vibes. What does it mean for a quality to inhere in something to a degree? Typically, qualities like mass and spatial extent just inhere, and their degree, 5 grams, 3 inches, are measurement ICEs that measure the quality.

Good point. The recommended fix is just an improvement of the CCO definition, not a perfection of it. I'm happy for more precise language to be used. But it is important to capture the fact that things can have financial value of a certain magnitude, without any measurement of that value being correct. So I don't think financial value itself is a measurement, though measurements are important.

[CarterBeauBenson]

FinancialValue =def. “A quality that inheres in an independent continuant to the degree that that independent continuant can serve as a financial instrument in an economic system at a particular time.”
I would take it a step further. It has never been clear to me that financial value is a quality, since a thing can lose all of its value without changing materially.

A thing can lose its weight quality without changing materially by going to a possible world without gravity. Weight is a quality. So, the fact that you can lose X without changing materially doesn't entail that X isn't a quality.

I think this is a compelling argument for weight to not be a quality. It needs to be acted upon by an external force to be realized. Sounds like a disposition to me. Mass, however, is clearly a quality. For me to have 0 mass is for my material to change such that I do not exist in a physical sense. CCO is wrong in its characterization of Weight.

We would have to believe that having no financial value is still having a financial value. But this is dissimilar to other qualities, since for a thing to have no mass, it would have to not exist in any way.

We need to distinguish between not having a financial value quality and having some measure of a financial value quality be zero. A measurement of zero doesn't mean that there is no financial value quality. It depends on the scale and unit being used. Just as a temperature measurement can be zero, but the measured thing can still have a temperature quality depending on the scale and unit being used.

The use of "can" makes it sound like a realizable. Qualities are, roles and dispositions can. This makes it sound like the financial value is realized when it used to do stuff in an economic system.

"Can" refers to the role or roles that the financial value quality depends on. The quality is, but has different magnitudes depending on the financial instrument roles that inhere (i.e., the degree to which the independent continuant can serve as a financial instrument).

This is an interesting claim, that the quality Financial Value depends on a Role. I suppose the range of specifically_depends_on allows for an SDC. That said, the definition does not show that the Quality has any relation to a Role.

The definition also gives measurement vibes. What does it mean for a quality to inhere in something to a degree? Typically, qualities like mass and spatial extent just inhere, and their degree, 5 grams, 3 inches, are measurement ICEs that measure the quality.

Good point. The recommended fix is just an improvement of the CCO definition, not a perfection of it. I'm happy for more precise language to be used. But it is important to capture the fact that things can have financial value of a certain magnitude, without any measurement of that value being correct. So I don't think financial value itself is a measurement, though measurements are important.

Fair enough. Although there are still a few phrases emboldened below that deserve analysis.
A quality that inheres in an independent continuant to the degree that that independent continuant can serve as a financial instrument in an economic system.

[cameronmore]

I would consider 'Weight' to be a kind of measurement of force and mass. You can gain and lose 'weight' but cannot lose 'mass' without simultaneously ceasing to exist. Weight is a measure of force and mass.

[BrendaBraitling]

ActOfTrading =def “A Planned Act wherein goods and services are exchanged between Agents”

It seems to me that several of these definitions require the act to include both goods and services in every exchange. I would think there are three cases.

• goods,
• services,
• goods and services

[avsculley]

FinancialValue =def. “A quality that inheres in an independent continuant to the degree that that independent continuant can serve as a financial instrument in an economic system at a particular time.”
I would take it a step further. It has never been clear to me that financial value is a quality, since a thing can lose all of its value without changing materially.

A thing can lose its weight quality without changing materially by going to a possible world without gravity. Weight is a quality. So, the fact that you can lose X without changing materially doesn't entail that X isn't a quality.

I think this is a compelling argument for weight to not be a quality. It needs to be acted upon by an external force to be realized. Sounds like a disposition to me. Mass, however, is clearly a quality. For me to have 0 mass is for my material to change such that I do not exist in a physical sense. CCO is wrong in its characterization of Weight.

Things must change physically to lose a disposition, and a thing can lose its weight without changing physically. So it can't be a disposition. Suggests to me a role, or a quality that is at least partially externally grounded. I lean toward a quality that is grounded in a gravitational field and the thing's mass because weight seems to be realized at all times it exists (making it a quality). Yet, there is this seemingly external dependence. It actually fits the definition of relational quality, but I am not sure if this is an intended possibility in bfo or because the definition of relational quality is underspecified (or both).

I think the same story can be told about financial value. It partially externally depends on the economic system, and partially internally depends on features of the thing with value. When it exists it is always realized, and can be lost without the thing changing physically, if it no longer exists in the context of an economic system that cares about it. But again I think the full story will depend on further inquiry into both economics and bfo/cco.

We would have to believe that having no financial value is still having a financial value. But this is dissimilar to other qualities, since for a thing to have no mass, it would have to not exist in any way.

We need to distinguish between not having a financial value quality and having some measure of a financial value quality be zero. A measurement of zero doesn't mean that there is no financial value quality. It depends on the scale and unit being used. Just as a temperature measurement can be zero, but the measured thing can still have a temperature quality depending on the scale and unit being used.

The use of "can" makes it sound like a realizable. Qualities are, roles and dispositions can. This makes it sound like the financial value is realized when it used to do stuff in an economic system.

"Can" refers to the role or roles that the financial value quality depends on. The quality is, but has different magnitudes depending on the financial instrument roles that inhere (i.e., the degree to which the independent continuant can serve as a financial instrument).

This is an interesting claim, that the quality Financial Value depends on a Role. I suppose the range of specifically_depends_on allows for an SDC. That said, the definition does not show that the Quality has any relation to a Role.

It's not clear to me that it is a role that the quality depends on. That's just one way to think about it. The only thing I'm prepared to commit to is a vague statement about financial value depending in some sense on the features of a thing that make it a financial instrument. But the good news is, no one knows exactly what financial value depends on, so we're in good company. So I do think we shouldn't commit to a particular view here so that users with different perspectives can use the model.

The definition also gives measurement vibes. What does it mean for a quality to inhere in something to a degree? Typically, qualities like mass and spatial extent just inhere, and their degree, 5 grams, 3 inches, are measurement ICEs that measure the quality.

Good point. The recommended fix is just an improvement of the CCO definition, not a perfection of it. I'm happy for more precise language to be used. But it is important to capture the fact that things can have financial value of a certain magnitude, without any measurement of that value being correct. So I don't think financial value itself is a measurement, though measurements are important.

Fair enough. Although there are still a few phrases emboldened below that deserve analysis. A quality that inheres in an independent continuant to the degree that that independent continuant can serve as a financial instrument in an economic system.

Yeah, we have to strike a balance here between specificity and usability. The "economic system" language, as I understand it, allows us not to commit to a view on whether financial value depends on collective intentions, rules, conventions, practices, or something else. We can probably just delete it though since all financial instruments exist within an economic system. But the other two I think can be replaced straight forwardly with the following:

A quality that inheres in an independent continuant because that that independent continuant is a financial instrument.

I don't think anything is lost by going with this version, though it now seems like it could be specifying only necessary conditions.

[avsculley]

ActOfTrading =def “A Planned Act wherein goods and services are exchanged between Agents”

It seems to me that several of these definitions require the act to include both goods and services in every exchange. I would think there are three cases.

• goods,
• services,
• goods and services

Yes, the definitions should be edited as follows

ActOfTrading =def “A Planned Act wherein goods, services, or goods and services are exchanged between Agents."

[avsculley]

I would consider 'Weight' to be a kind of measurement of force and mass. You can gain and lose 'weight' but cannot lose 'mass' without simultaneously ceasing to exist. Weight is a measure of force and mass.

If there were no measurements of weight, there would still be weight.

[arazdow]

Mass is a name for a physical quantity (see https://www.nist.gov/pml) intrinsic to matter. Measuring it requires units, for which the kg is the SI standard. Weight is commonly the force of gravity on a given mass at sea-level, but is a force (another physical quantity). Weight is not intrinsic to matter, nor is it a commonly used as a measure in science/engineering, but as a noun for colloquial reference to mass. “That rock weighs 10,000 lb” literally means it exerts 10k lbf (pounds force) on the ground, but the intrinsic property of the rock is the equivalent mass in lbm (pounds mass)

[arazdow]

@CarterBeauBenson NIST's use of "quantity" as a term is synonymous with "quality" as used here. CCO might consider the metrologist's use of quantity, quantity-category, units, unit-systems, intrinsic, extrinsic, intensive, extensive and so forth as concepts we should align with, and should no doubt generalize.