The author still does not understand how a P&L or balance sheet works. If you are selling a business and you can show the buyer you have a $175k contract that is profitable pending, it will only add value to the business. Showing guaranteed revenue and income to a potential buyer would only make a buyer more confident in buying the business and more willing to pay more, not less.
What it seems like happened is the customer paid all or a portion of the contract in advance. As such, the business recorded an increase in cash and had a corresponding liability recorded for unearned revenue. What likely happened was this cash was used to pay expenses and/or pulled out of the business and all that was left was a liability. Thus, it wasn't the fact that he had a future $175k contract that made the business worth less, but the fact that he used the funds he had been paid with for something other than the event. Thus, the author had less cash than he should have, which the buyer deducted from the sales price.
What it seems like happened is the customer paid all or a portion of the contract in advance. As such, the business recorded an increase in cash and had a corresponding liability recorded for unearned revenue. What likely happened was this cash was used to pay expenses and/or pulled out of the business and all that was left was a liability. Thus, it wasn't the fact that he had a future $175k contract that made the business worth less, but the fact that he used the funds he had been paid with for something other than the event. Thus, the author had less cash than he should have, which the buyer deducted from the sales price.