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Q:  

I've heard some discussion about capitalizing our data warehouse rather than expensing it. This means the data warehouse would appear on our company's books as an asset and we would amortize it. Is this legitimate? Do you have any recommendations on how we should go about it?

A:  

Sid Adelman's Answer: It seems to be legitimate. An asset is something that will have value in future periods and the data warehouse (if it's any good) certainly fits into that definition. Companies capitalize their ERPs and the guys with the green eyeshades don't object. Why not the data warehouse? You should be able to capitalize the expense of cleansing your data (which will have value in future periods), creating your meta data (which will...), defining and writing the ETL procedures, creating query and report libraries, the software expense, hardware devoted to the warehouse, consulting and contracting, and maybe your internal personnel costs. But you better check with your accounting staff rather than listen to someone who flunked Accounting 101.

Clay Rehm's Answer: I have heard discussion about this as well, but would recommend that you talk to a couple of CPAs to get their impression on this topic.

Would you also consider the data in the source systems as an asset? Also, what data is an asset - raw data that is keyed in or data that has been validated and verified? I would like to see this as an asset as well, but feel there is too much gray area when in comes to defining what data (and its location) can be considered an asset.

(Posted )


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