Our exponentially increasing costs (was Re: [Foundation-l] Re: Answers.com and Wikimedia Foundation to Form New Partnership)

[Daniel Mayer]

--- Anthony DiPierro <wikilegal at 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. 

> Anyway, I haven't looked that closely at your model and maybe you've figured
> out a way to capture this in some other way, or maybe it's just a
> coincidence that it's worked so far. How many quarters have you actually
> made predictions using this model (actual predictions, not backing into
> historical data after the fact)?

Every quarter since northern winter/Q4 of 2004. All the model really does is
figure out how much it cost per page view up to October 2004, chart our
projected exponential traffic growth curve and slowly inflate the amount of
performance we can expect per dollar value of hardware bought in the future
(Moore’s Law adjustments). It is a crude tool, but has worked pretty well so
far as a planning device.

> If you'd prefer I take this conversation off-list I can do that. 

Doing this on meta is going to have a much better chance of having lasting
value. The WM budget talk page is probably the best place to continue all this.

> 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



	
		
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