On 10/24/05, Daniel Mayer maveric149@yahoo.com wrote:
--- Anthony DiPierro wikilegal@inbox.org wrote:
What I'm saying is that the hardware you buy today is both a current
expense
and an investment in the future. The budget figures make it look like
it's
solely a current expense.
Hardware looses value so fast that it isn't really an investment in the strictest sense of the word. But yeah, it's a depreciating asset and is tracked as such in our accounting software.
It certainly doesn't lose its value in a single quarter! Probably at least 3 years, though 5 is more standard. 5 years turns a $2 million/quarter expense into $100,000!
I'm not
trying to criticise, just make some helpful suggestions; preparing
financial
statements on a GAAP basis is a large part of what I currently do for a living, after all.
Again - the books are kept offline (and I don't consider your questions to be criticism :). Getting as much information from the books in a publicly-accessible form is a major item on my ToDo list.
The [[Wikimedia Budget]] page mentioned that "The Wikimedia budget has to follow Generally Accepted Accounting Principles (GAAP) for Not-for-Profit Organizations", and GAAP requires statements
be
made on an accrual basis.
Yep - I wrote that. :)
Even if you're going to ignore this and use a cash basis, you should at least use a modified cash basis which factors in
things
like depreciation.
Our books are already on an accrual basis and our accountant figures out depreciation and all the foreign exchange gains and losses (thank god – doing that work is not fun). It is just that what has been reported thus far has been minimal and simplified. This will change as we work out our information flow and process issues.
-- mav
Heh, OK. Was the information which is online taken from the books, or was it made independently? My guess would be the latter.
Anthony