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"Assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events." - FASB Concept Statement No. 6
An asset is something that will have value in future periods, and the data warehouse (if it is any good) certainly fits into that definition. Companies capitalize their enterprise resource planning (ERP) systems and the guys with the green eyeshades don't object. Why not do the same for the data warehouse? A number of us have long maintained that the data warehouse (DW) is a real asset that has significant value to an organization - some of us even believe that the DW will make the difference between a company living and dying. Because the DW provides value in future periods, it represents an intangible asset that should be capitalized on a company's balance sheet along with the tangible assets of cash, accounts receivable, inventory plant and machinery.
Current and Future Accounting Rules The current financial accounting rules are heavily criticized as not reflecting the true value of IT assets such as those of the ERP systems and data warehouses. Under the current rules of the Financial Accounting Standards number 141 and 142, a data warehouse, as an intangible asset, could be capitalized at its fair value only when a company with an internally built data warehouse is acquired by another corporation. Thus, the CIO would be rewarded for managing a high value asset only when the data warehouse has been purchased. Today, a company with an internally created data warehouse would be shown as an intangible asset only at its capitalized historical cost. This historical cost probably does not capture the fair value of the completed project, nor does it capture all the costs associated with the data warehouse. The current accounting system in the United States allows one company to show a high value on the data warehouse that was purchased and a second company to have a lower value on a data warehouse that was internally developed. Thus, the company is not able to reflect the fair value created by the successful implementation of an internally developed data warehouse.
The Financial Accounting Standards Board (FASB) is working on a new standard to address the...