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

[Anthony DiPierro]

On 10/24/05, Daniel Mayer <maveric149 at yahoo.com> wrote:
>
> --- 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.


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