Actually, you should consider four categories:
- Software as a service (SaaS) should be expensed (and a recurring expense
at that) as a non-asset (not an asset since you own nothing)
- High-value software over a threshold value (like $5,000 or more) should be
classified as a capitalized asset (with a depreciation schedule)
- Low-value software under a threshold value ($5,000) should be classified
as a non-cap asset (without a depreciation schedule)
- Third-party-owned hardware of software on your premises (aka customer
premise equipment or CPE) is an asset, just not YOUR asset
Four scenarios:
- Your organization uses Google Gmail. That's SaaS, a recurring expense,
and you own nothing. Service or Non-Asset.
- You purchase a BMC Remedy AR System server license (well over $5,000) and
begin a 5-year depreciation schedule. Capitalized Asset.
- You buy a couple copies of Microsoft Visio and expense the purchase.
Non-Cap Asset.
- Verizon installs a DS3 box at your office building's Demarc. It's
Verizon's equipment, not yours. Customer premise equipment (CPE).
Careful, though, as some major acquisitions (especially hardware) often
include labor in the PO and invoice, and the whole purchase (including the
labor) is considered a capitalized asset with a formal depreciation
schedule. (For example, you purchase $2 million in Cisco routers and
switches and bundle it with $400K of design, rack/stack, and configuration
services.) Check with your accounting team to see if you should carry the
Cisco equipment with or without the bundled professional services.
Otherwise, your asset inventories will NEVER match the corresponding
financial reports.
Make sense?
-- Bing
Bradford Bingel ("Bing")
b...@itm3.com (email)
925-260-6394 (mobile)
_____
From: Action Request System discussion list(ARSList)
[mailto:arsl...@arslist.org] On Behalf Of Roberts, Chas
Sent: Wednesday, August 04, 2010 3:08 PM
To: arslist@ARSLIST.ORG
Subject: Re: How to classify software as a service in Asset
**
There you go
Classify some as "Asset" (the ones that are Assets)
And some as "Service" (the ones that are SaaS)
"That was EASY"R
Chas
From: Action Request System discussion list(ARSList)
[mailto:arsl...@arslist.org] On Behalf Of David Charters
Sent: Wednesday, August 04, 2010 2:54 PM
To: arslist@ARSLIST.ORG
Subject: Re: How to classify software as a service in Asset
**
They do it both ways here
From: Action Request System discussion list(ARSList)
[mailto:arsl...@arslist.org] On Behalf Of Roberts, Chas
Sent: Wednesday, August 04, 2010 4:44 PM
To: arslist@ARSLIST.ORG
Subject: Re: How to classify software as a service in Asset
**
The short answer is:
Software as a Service is a Service
Software as an Asset is an Asset
Does the software you are talking about classifying have extended ownership
rights?
Or do you "rent" it?
Chas
From: Action Request System discussion list(ARSList)
[mailto:arsl...@arslist.org] On Behalf Of David Charters
Sent: Wednesday, August 04, 2010 2:37 PM
To: arslist@ARSLIST.ORG
Subject: How to classify software as a service in Asset
**
Listers,
I was wondering if anyone had ran across this. I have a customer who uses
software as a service for several products. The question is from an
Asset/CMDB perspective how do you classify it, is it an Asset or is it a
Service?
Regards,
David Charters
317-331-8985
_attend WWRUG10 www.wwrug.com ARSlist: "Where the Answers Are"_
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