Re: On accounting and engineering.(Slightly offtopic)

[Adrian Hoe <mailbox@*nospam*adrianhoe.com>]

Darren New wrote:

> "John R. Strohm" wrote:
> 
>>That is probably not unreasonable.  Are you going to use that same software
>>for more than 5 years?  Or are you going to upgrade or replace it?
>>
> 
> Exactly. This just goes to show that engineers often don't even understand
> the most basic of accounting terms, like what "depreciation" means.
> 
> 


Software has either 0% or 100% depreciation.

Why 0%? Because software doesn't have wear and tear. SOme software may 
even run for 10 years or longer, like those legacy software. In fact, 
its value increases at time because of maintenance.

Why 100%? COTS like productivity software (eg. M$ Office) will become 
obsolete in 1-2 years time when new version is released. Can you sell 
it as 2nd hand??? (But it is still working)

The problem with software is that when you are still using it, it has 
value on your book. The moment you stop using it, the value becomes null.
-- 
type Dmitry is new Adrian;           -- Adrian Hoe
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